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Correct market timing is difficult so drip-feed cash into investments

Mitigating equity risk doesn't mean just having to hold cash
June 6, 2019, Kay Ingram and Ben Yearsley

Simon is a 54-year-old freelance IT consultant who earns £50,000 a year. His wife is 49 and earns £55,000 a year as an administration manager at a public sector institution, where she has worked for 30 years. Their home is worth £300,000 and has an outstanding mortgage of £40,000.

Reader Portfolio
Simon 54
Description

Sipp invested in funds and cash, Isas invested in direct shareholdings and cash, property

Objectives

Buy larger home, partially retire at 60 years, fully retire between 65 and 67 and draw £25,000 a year from investments, grow Sipp to £500,000 and grow cash savings to £100,000 in six years

Portfolio type
Investing for goals

"I hope to semi-retire at age 60, and fully retire between 65 and 67,” says Simon. “I remarried last year after divorcing in 2015, when I gave up two-thirds of my pension pot as part of the divorce settlement. I had £75,000 in my self-invested personal pension (Sipp) four years ago, but this reduced significantly. So I decided to grow this as aggressively as possible, and will invest up to £40,000 a year into it for the next five to six years. I currently have £243,000 in my Sipp, but would like this to grow to £500,000 by the time I am age 60, which shouldn’t require any significant growth. I also have cash worth £30,000 in an individual savings account (Isa) and hope my cash savings will grow to £100,000 or more by the time I am 60.

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