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Pruning a portfolio for a modest retirement

This investor can easily achieve his £4,000 income goal. But he needs to focus on his portfolio as a whole and take into account potential longevity and inflation risks.

Mark from Birmingham is 52 and has been investing since 1999. He has an investment portfolio worth around £150,000, plus £200,000 in cash and a mortgage-free home. He says: "I read some research which suggested that the average Briton needs £15,000 a year in today's values to be happy in retirement. I expect to get a full basic state pension (currently £6,029.40 a year) plus £5,200 from employer pensions. So if I can get around £4,000 a year additional income from my self-invested personal pension and other investments, I'll think that enough. You don't need a huge income to be happy."

He has started to build up investments in a self-invested personal pension (Sipp). "I like the Sipp for the tax advantages. I am a standard rate taxpayer. I will aim to maximise the tax benefit of annual Sipp investment, with some individual savings account (Isa) investments on any 'dips'. I wish I'd started my Sipp years and years earlier."

Reader Portfolio
Mark 52

Sipp and Isa


£4,000 annual retirement income


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