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Investors Anonymous - Suggestions wanted for simplified portfolio for 75yr old
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Jed Mires
Posted: 29 December 2024 16:39:22(UTC)
#24

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If somebody in Alan's situation in the US consults an independent CFA or a wealth management company, their portfolio recommendations are usually very similar. They would suggest 30%-50% tips ladder then 30% equities and the rest in nominal bonds. This portfolio is even easier to recreate in the UK because of inflation linked annuities. The UK version would be 50% inflation linked annuity and 50% lifestrategy 60 (or similar ). This way you can have a very good ,wealth manager recommended portfolio at a very low cost.
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ben ski
Posted: 29 December 2024 19:28:00(UTC)
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MarkSp;329619 wrote:
I would go about this a different way with looking at the income wanted needed and creating a barbell of growth and income. That is effectively what I have done

6% reits
10% renewables/Infra
16% Debt Credit Bonds etc

This nearly delivers all the income I will need and the REITS and Renewables give a degree of indexation

The rest should be in in Globals mostly trackers, some PE and some geographic ITs
No reason why it couldn't just be a range of global ETFs to simplify it further

The key is having the income coming in so you dont need to be a forced seller of anything


I think when you're really reliant on maintaining purchasing power for 15-20 years, you do want most the capital in government bonds (even cash).

Going for sectors like real estate, credit, infrastructure, global equities, etc. is really about growth – and at this stage, it's not worth risking an irrecoverable loss for growth that isn't really necessary.

REITs, Infra and credit – all of those can default in different ways. Labour could cancel PPPs, and then value the compensation for those assets themselves. If we had higher inflation, the discounted cash-flows could be an equity-like risk.
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Aminatidi
Posted: 31 December 2024 10:55:08(UTC)
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Alan given todays thread I'm still not clear on whether you've tried simply sticking the lot in suitable multi-asset fund or doing an xxd09?

I'm my own worst enemy on this stuff as I don't always talk my own game but I wonder if that mix of funds might not be helping?

There's a lot to be said about picking an asset allocation or appetite for risk and letting one of the "big names" get on with it for you.

Only asking as I'd assume once you take out an annuity it can't be undone so you need to be really sure 😊
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AlanT on 31/12/2024(UTC)
Elspeth Beaton
Posted: 31 December 2024 12:27:35(UTC)
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Alan- you have had your investing hand held for many years by a competent IFA until his retirement
Then suddenly you are now on your own and older -quite a sea change for an investor
Some of us here have been investing by ourselves for many years and have developed an ability to to cope with the constant normal stockmarket drops that obviously worry you-you perhaps have missed this firsthand experience with having a competent IFA
Handling volatility and risk in a portfolio is no light thing for an investor to have to suddenly take on at 75
You could handle this situation two ways
Firstly a conservative Asset Allocation-I personally have a portfolio (2 SIPPs and 2 ISAs) with 3 index trackers only in a 35/59/6 set up .6 = 2 years+ cash for living expenses
Simple cheap easy to understand and manage
But I have been doing this myself for over 25 years-grown a thick Investment skin!
Or you take out an annuity and have no investment worries ie stockmarket drops
This might be more suitable for you -removes worries and stress
However do your research thoroughly-get quotes from 3+ advisors-take your time as it is an irrevocable position
Good luck with your decision
xxd09
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AlanT
Posted: 04 January 2025 17:29:55(UTC)
#14

Joined: 23/07/2010(UTC)
Posts: 113
Elspeth Beaton;329547 wrote:
Thank you OmegaMale for the vote of confidence !!??
We are 2 x 78 year olds in the same position as the OP
Only difference -3% withdrawal rate -no doubt could take more but 3% seems to be enough
Portfolio remains unchanged-and probably will do to the finish
xxd09


May I ask: which are the trackers that you use and which seem to you to be personally satisfactory, all things considered?
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MarkSp
Posted: 04 January 2025 20:43:44(UTC)
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ben ski;329658 wrote:
MarkSp;329619 wrote:
I would go about this a different way with looking at the income wanted needed and creating a barbell of growth and income. That is effectively what I have done

6% reits
10% renewables/Infra
16% Debt Credit Bonds etc

This nearly delivers all the income I will need and the REITS and Renewables give a degree of indexation

The rest should be in in Globals mostly trackers, some PE and some geographic ITs
No reason why it couldn't just be a range of global ETFs to simplify it further

The key is having the income coming in so you dont need to be a forced seller of anything


I think when you're really reliant on maintaining purchasing power for 15-20 years, you do want most the capital in government bonds (even cash).

Going for sectors like real estate, credit, infrastructure, global equities, etc. is really about growth – and at this stage, it's not worth risking an irrecoverable loss for growth that isn't really necessary.

REITs, Infra and credit – all of those can default in different ways. Labour could cancel PPPs, and then value the compensation for those assets themselves. If we had higher inflation, the discounted cash-flows could be an equity-like risk.



For the second time today I have seen a comment on "growth". If that means a rising value of the investment pot then, I think growth is a good thing

All you need is a quick 20% burst of transitory inflation and your cash is going to be in trouble.

I am not sure what the right answer is but there is a risk to not having assets that can mitigate the impact of inflation especially as inflation is a very personal thing depending on what you spend your money on

If you aren't in cash there is an investment risk. If you are in cash there is an inflation effect. care home fees are not rising by 2.x % annually for example. I noticed on my first trip to Smithfield market for about 3 years that there were plenty of examples of 100%+ inflation and I saw an £80 turkey in tesco. £80 eight zero.

It is an interesting Q overall but one way to address it is not retire just because you can.

I have seem guys leave work and then get really bored and get another job that they pursue with the same vigour as the one that paid them five times more :)
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Busy doing nothing on 04/01/2025(UTC), Helen L on 05/01/2025(UTC), AlanT on 05/01/2025(UTC), Dexi on 07/01/2025(UTC)
Elspeth Beaton
Posted: 04 January 2025 23:27:25(UTC)
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Alan T-I use
Vanguard FTSE All Share Index Tracker Fund-2% of portfolio
Vanguard Developed World ex U.K. Index Tracker Fund-33% of portfolio
Vanguard Global Bond Index Fund-59%-of portfolio
Cash is in 2 x Skipton Instant Access Cash ISAs and a Tesco Internet Instant Access Cash Account-6% of portfolio
These particular 3 index tracker funds have been held unchanged for many years
Hope this helps
xxd09
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You have to change your life
Posted: 06 January 2025 18:25:14(UTC)
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Wouldn't it be better for Mr and Mrs T to take money as necessary from their ISAs?

If they commit to a regular drawdown from their SIPP, they would be paying £200 per month income tax.
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AlanT on 07/01/2025(UTC)
Elspeth Beaton
Posted: 07 January 2025 00:02:36(UTC)
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Rather agree
I would take the 25% tax free sum from the SIPPs and live off this tax free income from as long as possible-may be already done this?
After that live off ISA withdrawals as much as possible -tax free income again
Only then start using SIPPs and start having to pay tax -try to make your SIPP withdrawals within the 20% tax band only-if possible
xxd09
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Henry Smith
Posted: 07 January 2025 03:36:36(UTC)
#31

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I would suggest the following at your age -

PruFund Growth
Multi Asset
50% Equities
50% bonds/property/private equity/infrastructure
It will give you a smoother journey than traditional funds/trusts.

Troy Trojan Total Return
Quality equities/bonds/gold.
Elegantly simple portfolio construction that has stood the test of time.

Lifestrategy 60
The classic 60/40 equity/bond balanced portfolio with a UK bias.
Now that bonds have been repriced it could be a good place for your money.

I suggest you do your own homework on all these suggestions especially regarding low cost platforms etc
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AlanT on 07/01/2025(UTC)
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