Pension Transferred
Well it finally happened. Despite the best attempts by Willis Towers Watson to delay the process, I finally received my money, all £910k, into my new SIPP. Now the fun starts!
Transfers of Defined Benefit Pensions (or Final Salary schemes) into private pensions (such as SIPPs) have been getting a lot of bad press recently. Fears of miss-selling claims are front and centre of IFAs' minds. I can understand this because most recipients of these transfers have no experience of investing successfully. Getting hold of the money is only the first step, investing it for growth, and then for income, is needed for a financially successful retirement.
My job now is to build a portfolio that can grow over the next year or two. At 54 I have to wait at least a year before I can drawdown my pension. I would love to use that year to grow my fund by 20%. This is the target I set (and am beating) this year on my ISAs.
A more realistic target would be to grow the funds to a cool £1m, a 10% growth. Obviously a lot depends on where the markets go this year. We have been in a long and consistent bull run for about 8 years now and "experts" are all calling time on these conditions and fear a mighty crash.
But economic conditions globally seem to be good (or better than expected). I feel (or hope) that we have more time before the crash. Being too cautious will hurt my wealth so I will be investing rather than sitting on the sidelines.
In the past, with a smaller portfolio of about £200k, I have been quite disorganised with my investment decisions. This is reflected in the number of transactions that litter the Sharescope graph of my portfolio. This disorganised approach hasn't been unsuccessful but, with the new SIPP being reviewed annually by my IFA, I feel I need to justify each holding and each transaction. This renewed discipline has made me think hard about asset allocation and, indeed, the types of investment types available to me.
My IFA gave me a model portfolio full of tracking unit trusts, split over different geographies. I considered, but have changed, the recommended geographic allocation.
As you can see I have taken some "UK" and "US" allocation and given it to "Europe" and "Other". I haven't decided what "Other" is yet but it is likely to be a themed fund like Healthcare or Technology, or it may be something more aggressive like a small sub-portfolio of individual stocks.
Exciting times!
Transfers of Defined Benefit Pensions (or Final Salary schemes) into private pensions (such as SIPPs) have been getting a lot of bad press recently. Fears of miss-selling claims are front and centre of IFAs' minds. I can understand this because most recipients of these transfers have no experience of investing successfully. Getting hold of the money is only the first step, investing it for growth, and then for income, is needed for a financially successful retirement.
My job now is to build a portfolio that can grow over the next year or two. At 54 I have to wait at least a year before I can drawdown my pension. I would love to use that year to grow my fund by 20%. This is the target I set (and am beating) this year on my ISAs.
A more realistic target would be to grow the funds to a cool £1m, a 10% growth. Obviously a lot depends on where the markets go this year. We have been in a long and consistent bull run for about 8 years now and "experts" are all calling time on these conditions and fear a mighty crash.
But economic conditions globally seem to be good (or better than expected). I feel (or hope) that we have more time before the crash. Being too cautious will hurt my wealth so I will be investing rather than sitting on the sidelines.
In the past, with a smaller portfolio of about £200k, I have been quite disorganised with my investment decisions. This is reflected in the number of transactions that litter the Sharescope graph of my portfolio. This disorganised approach hasn't been unsuccessful but, with the new SIPP being reviewed annually by my IFA, I feel I need to justify each holding and each transaction. This renewed discipline has made me think hard about asset allocation and, indeed, the types of investment types available to me.
My IFA gave me a model portfolio full of tracking unit trusts, split over different geographies. I considered, but have changed, the recommended geographic allocation.
As you can see I have taken some "UK" and "US" allocation and given it to "Europe" and "Other". I haven't decided what "Other" is yet but it is likely to be a themed fund like Healthcare or Technology, or it may be something more aggressive like a small sub-portfolio of individual stocks.
Exciting times!
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