Monthly income.
Discussion
I’m retired and my wife doesn’t work and her pension isn’t due for 2 years.
At present I have a small portfolio to top up my pension at the rate of £1k per month which is making 9% pre tax.
I’ve just come into a small inheritance of £26k which I don’t have immediate need for.
Am I better dropping the £1k from my portfolio and sticking the £26k into premium bonds and withdrawing at £1k month instead on the premise that I’m never going to get 9% anywhere else and might as well leave the portfolio making money?
Drawweight said:
Am I better dropping the £1k from my portfolio and sticking the £26k into premium bonds and withdrawing at £1k month instead on the premise that I’m never going to get 9% anywhere else and might as well leave the portfolio making money?
Isn't another question am I better dropping £26K into the portfolio and continuing to withdraw £1K a month?I would say the critical bit of information is what is the existing portfolio that is yielding 9%?
By far the best and safest means to increase income is to exchange leisure hours for labour hours. As a household of two viable labour units there would be tremendous income creation from just utilising a few leisure hours and its zero risk.
9% gross yielding £1000/month (gross/net?) implies a pot in the region of £140-200k that is running very high risk. Depending on what it actually is there is potential for income to go to zero and even the capital to go to zero. Can you shed any light on this investment?
Also, what is your pension and what will your wife's be in terms of what they yield each month and how?
By far the best and safest means to increase income is to exchange leisure hours for labour hours. As a household of two viable labour units there would be tremendous income creation from just utilising a few leisure hours and its zero risk.
9% gross yielding £1000/month (gross/net?) implies a pot in the region of £140-200k that is running very high risk. Depending on what it actually is there is potential for income to go to zero and even the capital to go to zero. Can you shed any light on this investment?
Also, what is your pension and what will your wife's be in terms of what they yield each month and how?
DonkeyApple said:
I would say the critical bit of information is what is the existing portfolio that is yielding 9%?
The portfolio might be getting smaller!£26K into PBs will last 26.01 months so that plan won't work.
If you don't want/need to spend the inheritance I'd add it to the portfolio and give it a better chance to grow.
Okay more details.
The pot is £107k
Performance last year was 9.4% before tax/charges which I’m quite happy with.
When I retired 18 months ago we thought we could survive on my pension plus private pensions plus £500 out the pot which should be able to maintain the balance.
As usual we underestimated and upped it to £1k a couple of months ago. This level will of course deplete the pot but it’s only for 2 years till my wife gets her pension then we can drop it back to a sustainable level.
So now we’ve come into this relatively unexpected £26k and want to make the best use of it over the next 2 years. (Actually it was more but we booked a holiday and I got a new motorbike / being cautious is fine but money is for enjoyment)
The pot is £107k
Performance last year was 9.4% before tax/charges which I’m quite happy with.
When I retired 18 months ago we thought we could survive on my pension plus private pensions plus £500 out the pot which should be able to maintain the balance.
As usual we underestimated and upped it to £1k a couple of months ago. This level will of course deplete the pot but it’s only for 2 years till my wife gets her pension then we can drop it back to a sustainable level.
So now we’ve come into this relatively unexpected £26k and want to make the best use of it over the next 2 years. (Actually it was more but we booked a holiday and I got a new motorbike / being cautious is fine but money is for enjoyment)
Drawweight said:
Performance last year was 9.4% before tax/charges which I’m quite happy with.
It may have been due to 'Covid bounceback'. You really need to look at gain NET of costs and charges, and over several years, to get a useful picture.The good news is that the cavalry arrives in two years so you can save or spend the £26K as you see fit
Drawweight said:
So now we’ve come into this relatively unexpected £26k and want to make the best use of it over the next 2 years. (Actually it was more but we booked a holiday and I got a new motorbike / being cautious is fine but money is for enjoyment)
Putting it all into the pot and drawing down at £1K a month is likely to leave you with more in total at the end, but there's a not insignificant risk you could end up worse off overall if the market drifts down, and you're drawing from a steadily declining investment.
Depending on your attitude to risk, you can vary the amount that gets invested vs put in premium bonds to taste.
edit - fixed drawdown to £1k/month not £1k/year.
Edited by xeny on Sunday 3rd October 15:50
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