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Jane, aged 54, aims for £15k tax-free income

Our experts urge this investor to fine tune her holdings and concentrate on tax planning for a better outcome when she and her husband retire in 4 years' time

Jane is 54 and has been investing for 10 years, with the aim of generating a tax-free income in retirement.

She says: "I make all the investment decisions for me and my husband as he has no interest in investment at all. I feel fairly comfortable making decisions, but wonder whether I am on the right track, especially when there is lots to read around active vs passive investing which always makes me feel I am doing it wrong.

"I would not be happy paying for someone else to take decisions for me, but appreciate I am definitely no expert.

"My husband has a projected final-salary pension of £30,000 and I am trying to ensure that our individual savings accounts (Isas) and self-invested personal pensions (Sipps) will produce additional income of around £15,000-£18,000 a year.

"We are already taking the income from investments partly to see how this 'works' and using the additional income to pay down our £50,000 mortgage rather than simply using capital to clear this debt. I have worked out that paying off the mortgage would result in a net loss to our income.

"We would like to help our 22-year-old son on to the property ladder and have earmarked my husband's pension lump sum of about £55,000 for this.

"In the past we have focused on specific themes and sectors and concentrated on growth funds, but this has since changed as I hated the volatility associated with such investments.

"So for the past few years virtually everything in the portfolio has an income bias. I don't believe we will need to touch our capital for a number of years so feel relaxed about fluctuations in capital values so long as the income rolls in.

"We invest £2,245 each month into our Isas and will continue to do so until we retire in around four years."

Reader Portfolio
Jane 54
Description

Individual savings account and self-invested personal pensions

Objectives

Tax-free income of £15,000

 

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