Join our community of smart investors

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
Description

Sipp and Isa

Objectives

£4,000 annual retirement income

MARK'S ATTITUDE TO RISK

To continue reading...
Join our Community of Smart Investors
  • Independent full-length company analysis
  • Actionable investment ideas and recommendations
  • Expert investment tools and data
  • Stock screens from Algy Hall
Have an account? Sign in