I’m in flexi drawdown commenced this year. Over the past 2-3 years I sold out of some stocks taking the profit. I’ve now got £24k in cash in my sipp. So I’m not going to have to sell anything for the next 3 years. I’m only taking my tax free 25% cash free money each month and leaving my equities in my drawdown account crystallised. In 4 years my drawdown complete as state pension commences. You are right planning for what to do is essential. I loved doing it!
Thank you for logically laying out the various factors that should be considered. I especially like not being told you have some mystical magical system you need to sell.
I retired at 53 2 years ago. Isa dividends blue-chip ft100 companies provide above average national wage I don't drawdown other than from my sipp around 12k a year from sp500 etf or legal and general global 100. Thats again topped up with around 13k in dividends within the sipp. I have no debt and i keep under the personal allowance. 👍
I must say I love dividend investing, getting those payments in for just holding a company is amazing. from what I've witnessed it all comes down to having a Licensed investment Adviser to handle your portfolio. All thanks to mine, who has traded my savings daily from quarter a million to almost one million dollars in the last 9 months.❤✅
WOOW !! Essmildaa Morgan is finally getting the popularity she deserves and this docent come as a surprise. my favorite stocks She invest in are Amazon,Walmart, TELSA and currently, Crowdstrike.
Consistently investing in quality dividend paying companies with the right guidance over the long term is a relatively easy plan to create generational wealth.
Thanks, Principles Personal Finance! Please have a contingency plan for the sequence of return risk during the first five to ten years of retirement. Much like planning for a descent down a steep mountain, there's a lot that goes into anticipating and knowing what to watch out for in advance; outstanding job on the video!
Good video on the risk of sequencing risk. Holding a contingency fund in near cash mitigates the risk and helps one sleep well at night 🌙. Gotta stop chasing the returns and value overall objective
I did some of both! An annuity to cover my basic, essential needs, RPI linked. The rest in drawdown. Oh, plus an emergency fund in cash, so I can not draw anything at all for 2-3 years if (when) the market crashes and (though I’d nervously tighten my belt a bit) I’ll have much the same standard of living.
This is the way, especially the emergency fund so you can stop withdrawing from the equities pot entirely until it is recovered (the annuity aspect helps here too!), but it does all require a decent upfront pot!
I'm surprised you never mentioned the benefits of owning rental property over an annuity. I mean, in theory, you can aim to have enough rental income coming in from rental properties to cover your basic expenses and set aside a lump sum in the stock market to draw down on to cover one-off expenses like new boilers, etc. It might cost about the same as an annuity over time but give greater flexibility. The benefit of rental property is that you will increase the rent over time to keep up with inflation, meaning that the rental income will likely cover your basic expenses for life. You will have a pot of money in the stock market that will cover the major lifetime expenses of owning property, which you may not even have to use as your property may never be flooded or have serious issues. And you still have an asset in a rental property you could sell to buy an annuity should your circumstances or risk appetite change in the future. Basically, if you own a couple of rental properties with mortgages paid off that cover your monthly expenses and have a good buffer in investments in the stock market to draw down on, you have effectively replaced your income from work and could sustain your current level of spending into the future. Besides, most of us are used to our salary coming in monthly, which means if our salary is replaced by monthly rental income, it will be easier to manage and stop us having sleepless nights about calculating how much to draw down on from stock investments to live on throughout the year.
I don't wholly disagree, however my personal experience of 30+ years as a landlord is that, unfortunately the projected income from rental property looks far better on a spreadsheet, than the real world cashflows, especially when a tenant falls on hard times (which is a real issue currently) and can't or won't pay. Aside from the stresses surrounding dealing with a tenant with issues (unless you are an old school "Rackman" type landlord ;-) ) you can easily write off a year or more rental income ( whilst still paying the outgoings) if you need to remove said tenant (with minimal real world chance to recover it - no real point suing someone who has no money). I agree the yield and inflation 'protection' may indeed work out but there are plenty of under rewarded risks over that of an annuity or other investment, that don't always seem apparent in the simple high level yield comparison. Heading into retirement I for one would happily now take a little less return for less stress, but horses for courses.
@Simonpocarroll I agree. In retirement rental income comes with its own set of risk and stresses. Not something to be entertained in retirement imho ❤
Valuable advice. Don't choose an advisor from the comments. They are scammers.
I’m in flexi drawdown commenced this year. Over the past 2-3 years I sold out of some stocks taking the profit. I’ve now got £24k in cash in my sipp. So I’m not going to have to sell anything for the next 3 years. I’m only taking my tax free 25% cash free money each month and leaving my equities in my drawdown account crystallised. In 4 years my drawdown complete as state pension commences. You are right planning for what to do is essential. I loved doing it!
Careful, this new government is looking for cash and the 25% tax free is probably too good to leave alone
Thank you for logically laying out the various factors that should be considered. I especially like not being told you have some mystical magical system you need to sell.
I retired at 53 2 years ago.
Isa dividends blue-chip ft100 companies provide above average national wage
I don't drawdown other than from my sipp around 12k a year from sp500 etf or legal and general global 100. Thats again topped up with around 13k in dividends within the sipp.
I have no debt and i keep under the personal allowance. 👍
Congrats on your retirement 🙌
I must say I love dividend investing, getting those payments in for just holding a company is amazing. from what I've witnessed it all comes down to having a Licensed investment Adviser to handle your portfolio. All thanks to mine, who has traded my savings daily from quarter a million to almost one million dollars in the last 9 months.❤✅
Amazing ! I have Liquid $150K to put into stocks, but i want to ensure good profits & safety. how did you find the right Investment Advisory?
Essmildaa Morgan is well known, just look her up
WOOW !! Essmildaa Morgan is finally getting the popularity she deserves and this docent come as a surprise. my favorite stocks She invest in are Amazon,Walmart, TELSA and currently, Crowdstrike.
Consistently investing in quality dividend paying companies with the right guidance over the long term is a relatively easy plan to create generational wealth.
SPAM @@veliadisrosasjr1647
Thanks, Principles Personal Finance! Please have a contingency plan for the sequence of return risk during the first five to ten years of retirement. Much like planning for a descent down a steep mountain, there's a lot that goes into anticipating and knowing what to watch out for in advance; outstanding job on the video!
100%! Thanks for watching David 🙌
Good video on the risk of sequencing risk. Holding a contingency fund in near cash mitigates the risk and helps one sleep well at night 🌙. Gotta stop chasing the returns and value overall objective
Thank you! Appreciate you watching
I did some of both! An annuity to cover my basic, essential needs, RPI linked. The rest in drawdown. Oh, plus an emergency fund in cash, so I can not draw anything at all for 2-3 years if (when) the market crashes and (though I’d nervously tighten my belt a bit) I’ll have much the same standard of living.
This is the way, especially the emergency fund so you can stop withdrawing from the equities pot entirely until it is recovered (the annuity aspect helps here too!), but it does all require a decent upfront pot!
But seriously. Good video sir
Thank you, glad you liked it! 🙌
Thanks for the video George
Thanks Simon, cheers for watching!
Still Chuckle at “a poor mans James shack” from many videos ago
Still the best joke I've landed on this channel! 🤣
Don't spend it all. QED 😊
I'm surprised you never mentioned the benefits of owning rental property over an annuity. I mean, in theory, you can aim to have enough rental income coming in from rental properties to cover your basic expenses and set aside a lump sum in the stock market to draw down on to cover one-off expenses like new boilers, etc. It might cost about the same as an annuity over time but give greater flexibility. The benefit of rental property is that you will increase the rent over time to keep up with inflation, meaning that the rental income will likely cover your basic expenses for life. You will have a pot of money in the stock market that will cover the major lifetime expenses of owning property, which you may not even have to use as your property may never be flooded or have serious issues. And you still have an asset in a rental property you could sell to buy an annuity should your circumstances or risk appetite change in the future. Basically, if you own a couple of rental properties with mortgages paid off that cover your monthly expenses and have a good buffer in investments in the stock market to draw down on, you have effectively replaced your income from work and could sustain your current level of spending into the future. Besides, most of us are used to our salary coming in monthly, which means if our salary is replaced by monthly rental income, it will be easier to manage and stop us having sleepless nights about calculating how much to draw down on from stock investments to live on throughout the year.
I don't wholly disagree, however my personal experience of 30+ years as a landlord is that, unfortunately the projected income from rental property looks far better on a spreadsheet, than the real world cashflows, especially when a tenant falls on hard times (which is a real issue currently) and can't or won't pay. Aside from the stresses surrounding dealing with a tenant with issues (unless you are an old school "Rackman" type landlord ;-) ) you can easily write off a year or more rental income ( whilst still paying the outgoings) if you need to remove said tenant (with minimal real world chance to recover it - no real point suing someone who has no money). I agree the yield and inflation 'protection' may indeed work out but there are plenty of under rewarded risks over that of an annuity or other investment, that don't always seem apparent in the simple high level yield comparison. Heading into retirement I for one would happily now take a little less return for less stress, but horses for courses.
@Simonpocarroll I agree. In retirement rental income comes with its own set of risk and stresses. Not something to be entertained in retirement imho ❤