The approach to retirement is a sensible time to review one’s investment strategy. Decades of investing help build up knowledge, confidence and portfolios, but can sometimes make such a review daunting – especially if it involves a string of stocks and funds for which you are no longer completely sure of the purpose. Gregory and Maureen are far from the first couple to come to these pages for help, and they won’t be the last.
Gregory is 61 and recently retired, and next year will be joined by his wife, Maureen, 59. The couple are in a good position, with substantial savings and defined benefit pensions combined with a very realistic income aim. They have more than £2.2mn to spend on their retirement, and with two adult children already on the housing ladder, the outlook for substantial one-off expenses is limited – excluding care, which they would like provisions for. The savings are held across a range of different accounts, and Gregory suggests they need around £50,000 annual income after tax. So far, so good.
The largest component is Gregory’s workplace pension – this remains untouched apart from his tax-free lump sum, which has been shared with the family. It is invested in a ‘target date fund’ and so at this stage will mainly be allocated to bonds. Gregory manages his and Maureen’s personal pensions, Isas and general investment account – worth a total of nearly £1.3mn. However, this is where it starts becoming complicated.