Don't De-Risk For Retirement Income! HERE'S WHY

[@DamienTalksMoney]

Yes Chris!! Couldn’t agree more on your points here. I am about to drop a video on this and wanted to just basically fact check myself against a few others. Loved your presentation style and editing and how concise you have presented this

[@chrisbourne-retirementplanner]

That’s high praise coming from you Damo! Thanks for saying that I appreciate it. I’ll look forward to your vid when’s it dropping?

[@vikramsharma4828]

Please keep this up, the contents of this was concise and so informative. Thank you!!!

[@chrisbourne-retirementplanner]

Thank you Vikram. I’ll try to keep putting helpful content out there! 👍🏼

[@ThornySubject]

Another great video, thank you Chris! More by luck than judgement really, I left my pension pot invested in a UK equities fund for the last few years, and thank goodness I did, as it's increased the pot's value by about a third. However, with the natural ups and downs, the uncertainty of what the final value will be once the pension actually starts, is the one thing putting off a fixed-term annuity (that you discussed in another video). That does make the flexi-access drawdown an attractive option like you say, as it takes away the worry about my pot's value when tranferred to L&G's Mastertrust scheme where it will continue to be invested.

[@chrisbourne-retirementplanner]

Thank you! I’m glad you enjoyed it. My view on bonds has changed somewhat (at least in the short term) since I made this video. Most of the short term risks have pretty much played out, so bonds are providing better value now. Long term though, equities should still win.

[@ThornySubject]

@@chrisbourne-retirementplannerAh OK thanks for that update. One thing I'm wondering if you've done a video about, is the potential cost to one's pension pot of switching investment funds. An L&G advisor told me it's impossible to predict, as there's lot of different factors in play. A PDF of their tries to explain how it works, but (to me at least!), not very successfully 😂. I'm so close to crystallising the pot now in any case, I'm tempted to just leave it in UK equities anyway if the cost of say t/ferring to a cash fund is going to be high!🤔

[@EdmundBaileyUK]

This is great Chris, so concise and clear!! And you are killing it on YT! If it’s OK with you I might reference this video, put a link in a future one I’m doing on sustainability of income, no worries if not? This is far better and clearer than I can explain the cash management. 👍

[@chrisbourne-retirementplanner]

Of course Ed I’m more than happy for you to reference my video - I really appreciate you saying that!

[@irishdin1836]

@Chris - you've to have a heart of gold to put out information like this for free. I can't tell you how much i appreciate these videos, i've learnt so much from seeing a few of these than 5 years of searching websites, reading blogs and stuff. Thank you! In the age of pension freedoms and defined contribution schemes where employers don't cap but neither contribute to the schemes (nor offer salary sacrifice/matching) one question that bothers me is : here in the UK, how should one, as one moves from a low wage salary (and corresponding tax bracket) to a higher one, plan to allocate into a pension wrapper versus an ISA. I know it's never an either/or but both, but is there a formula for calculating "x" into pension, "y" into ISA based on "z" base salary? More and more PLCs are doing this (they don't contribute to the G-SIPPs) so we could soon have almost all young earners facing this situation by 2030.

[@chrisbourne-retirementplanner]

What a fantastic comment! It’s really made my day. Thank you so much. To answer your question, there is no specific formula because it does depend on a variety of individual factors, which are probably too numerous to mention. I would say that generally, the upfront tax relief on pension contributions does tend to produce a better long term capital result than an ISA, even though tax is paid on exit (particularly if you are gaining higher/additional rate relief). This does suppose that you don’t have other significant taxable income sources in retirement though, because the balance can then sometimes swing in favour of the ISA. There’s no doubt that having both helps with from a financial planning perspective taking elements of flexibility and taxation into account.

[@irishdin1836]

@@chrisbourne-retirementplanner Thank you for replying Chris! I appreciate it.

[@iQinvesting]

Completely agree with this logic. It may seem scary at first but when you consider the points that you made, it's a no brainer for me!

[@chrisbourne-retirementplanner]

It's never let me down so far I have to say!

[@unorthodoxsavings9552]

This videos going viral Chris. Great job 👏🏻

[@chrisbourne-retirementplanner]

Seems to have caught a bit of interest! How you doing anyway man still raking in those gains?!

[@fiddycaliber947]

That's really interesting, and presumably means the '£1M to retire' can still built upon post-retirement.. I'm sure there's some magical maths that explain that better than I can.. Stay awesome Chris.

[@chrisbourne-retirementplanner]

Cheers Scott! Yes you’re right essentially - allocating some cash aside to draw income from means you’re not at risk of selling units at the wrong time. You retain control over when invested units are sold. The amount of growth you can achieve is based on a lower figure of course (if you’re targeting £40k pa income and you’ve put £80k aside, you will only be getting growth on £920k), but the key thing is retaining control over sequence of returns risk.

[@coderider3022]

My default provider (big name) wants a 10 or 15 glide slope to an eventual money market / bond portfolio. Assumption is your buying an annuity I think.

[@jblue2435]

Excellent advice. This is something I have been questioning myself since the company I work for transferred my DC pot into a master trust. The default fund being a pathway fund that uses your expected retirement age to slowly transfer out of equities. Appreciate the advice.

[@chrisbourne-retirementplanner]

Thank you! Really pleased you’ve found this useful.

[@sdpryce]

So glad I found your videos. Thank you.

[@chrisbourne-retirementplanner]

Thank you Sean I really appreciate your comment and glad my videos are useful!

[@adeajuwon931]

Fantastic content! I totally agree with the 2 years income strategy. Thanks for sharing.

[@chrisbourne-retirementplanner]

Thank you Ade 👍🏼 I must admit, it has never failed any of my clients so far.

[@Worldwithoutboarders]

My work pension with L and G lifestyle will start to de risk from 20yrs to retirement date. That shocked me since this is when you want to build with compound interest. At the time they had 2 default funds with 1 at 10% return and other at 4% but after years they were about the same size? They were putting more of my money into the pooer fund! That was when i changed it to free style. That was ariund the age of 45 almost 10 years ago.

[@dantalksmoney3310]

Another great video Chris! Hope you don't mind me asking a question here: I've been agressively paying into my Auto enrolment workplace pension over the past year with Smart Pension but have realised that when I retire I need to move the funds from them into a drawdown platform such as Vanguard. If when it comes time to move between the 2 we are in some sort of depression I'm guessing that this is going to negatively effect my pension pot. So if that is the case would it better to hold the money with Smart until the markets improve or bite the bullet and move to Vanguard to begin my investments with them and hope I can bounce back from the losses? Totally understand if your unable to answer this but thought I'd ask!

[@chrisbourne-retirementplanner]

Hi Dan. In some ways it’s as long as it is short - you may be selling at depressed levels, but you’re also buying back immediately at depressed levels too. The only risk is that the few days you’re out of the market happen to be the days when everything rebounds! That’s probably unlikely though as a recovery usually takes a bit of time.

[@michaelfarrell7319]

thank you once again Chris can you do one of final salary I have 2 military and company pensions is it good idea to take your tax free lump sum the pros and cons or is it better to leave it where it is ?

[@chrisbourne-retirementplanner]

Hi Michael. Well this is a personal decision. The pros are that the lump sum is of course tax free, whereas all income is potentially taxable. That’s why most people choose to take lump sum. However, if you don’t need a lump sum, you already have inheritance tax concerns, or the commutation rate is poor, you may find more income is a better choice for your circumstances.

[@nickfifield1]

Hi chris, I often hear people should have a cash pot of a couple years . Do you see most people take that cash from their pension , or saved it up outside a pension . The later can be difficult.

[@chrisbourne-retirementplanner]

A see a little of both Nick! Sometimes people have accrued cash reserves through various means and like to live on that in the early stages of retirement. In other cases, we may have specifically allocated some holdings to cash in the pension to manage the sequence of returns risk. Always important to find that balance between enough cash, and not too much.

[@cameronbrindley6180]

Liked for the algorithm! More people need to see your channel. I look daily to see if you’ e posted, your content has really helped me to avoid mistakes. Great content Chris 👍

[@chrisbourne-retirementplanner]

Thanks Cameron. I appreciate your support. Was it you who posted that reply to the guy a couple of weeks ago before he took his comment down? The one who was bashing Freetrade? If so, I thought it was awesome 👏🏼 😅

[@cameronbrindley6180]

@@chrisbourne-retirementplanner Yeah that was me 😅 i know being a content creator can take a lot of time and editing and when people like that come along saying things like “you’re showing your true colours” or what ever it is he said is really disrespectful and be discouraging for the creators. This then can have a knock on affect and ruin it for other people. Glad you liked it. 😂 Again thanks for the content Chris 👍

[@nickfifield1]

Great channel - always watch , even if I don’t completely agree! Keep up good work please 🙏

[@chrisbourne-retirementplanner]

Thanks Nick. Much appreciated 👍🏼

[@nickfifield1]

The question is when should people start building cash for retirement? Too early , loose out on what could be equity gains. Too late, not enough . What you suggest ? 5yrs out , 2 years ?

[@chrisbourne-retirementplanner]

Hi Nick. It depends on how much cash you’re looking to build and how much you’re able to contribute. Many people start splitting contributions between risk assets and cash in the latter stages. The tax relief alone provides a certain amount of guaranteed ‘growth’ of course.

[@gcrichards1]

Great advice thanks, I've always wondered why the general consensus was to back out of the stock market and into bonds at close to retirement. It seems counter intuitive.

[@chrisbourne-retirementplanner]

Thank you! Glad you enjoyed it.

[@johnporcella2375]

Friend of mine working for a FTSE100 company found his DC occupational pension value hammered just before he retired. Hence the need, I see now, to take some wins out of the firing line.

[@nickfifield1]

What’s a sensible cash pot size? 2 years ? 4 years ?

[@chrisbourne-retirementplanner]

Typically 2 is a good rule of thumb and that is based on the low probability of more than two years of consecutive market falls. Too much can create performance drag. Ultimately though, it’s whatever makes someone feel comfortable. For many, the maths aren’t as important as the emotion and the feeling of safety.

[@davidc2570a]

Hi Chris, new sub here. Very informative video. So following your logic would it be ok to stay 100 percent in stocks at retirement as long as you had a 2 year cash buffer or should we still have some bonds? Thanks.

[@chrisbourne-retirementplanner]

Hi David. If you’re still willing and able to think long term with your retirement investments, beyond the date of benefit commencement, yes, holding stocks provides highest probability of best return. Having said that, outlook for bonds has markedly improved since the rout of last year.

[@Richb711]

You're just talking about the bucket portfolio, which is my approach.

[@robertmillar84]

Hi Chris, firstly, great video! This is something I'd always wondered about and it's great to hear you address this issue and challenge some of the 'normal' thinking. I have a question though, in the last section you give a couple of example strategies for building up the cash element and you say that one way could be to start putting some cash aside ahead of your retirement and use that as your initial income, whilst also keeping investing in equities presumably. Instead of putting cash aside, would it not be better to buy some bonds to at least provide some kind of return? And if so would that not then take you back to the original thing that this seeks to avoid i.e. diversifying into bonds before 'drawdown'?? Many thanks.

[@chrisbourne-retirementplanner]

That’s great I’m glad it was useful! I would always take withdrawals from cash because whilst bonds are less volatile than equities, their prices still fluctuate so still don’t remove the sequencing risk entirely. Low risk investment grade bonds also won’t provide a significant amount of over performance above cash currently anyway, so the additional risk doesn’t seem worth it. The difference with building cash manually is that YOU choose how much you’re putting aside... instead of your portfolio being 40-50% in bonds, you would have far less than that in cash. Let’s say you’ve got £1m and want to take £40k a year with 2 years cash parked - that’s 8% (maybe a tad more to account for inflation). The other 92% would be invested.

[@philipdrew1066]

It would be interesting to see an update on this for current market conditions given that bonds are providing better returns than they were 2 years ago

[@chrisbourne-retirementplanner]

Yes, I agree - I've covered bonds in my most recent video (Why choose bonds over cash).

[@dudleyjoseph9485]

Really good video. First time I've really seen anyone explain it well.

[@chrisbourne-retirementplanner]

Thanks for that Dudley! Really pleased you enjoyed it.

[@malvanlondon8683]

Thanks for the interesting and informative video. Do you have one about self-employed people close to retirement (say five or ten years away from receiving their state pension) and whether it''s worth it or not to start a SIPP?

[@chrisbourne-retirementplanner]

Hi there. Not specifically, but in general there is no problem starting a SIPP later in life… Tax relief is still valuable, even if it doesn’t get the same time in the market. You can also access that tax relief reward much more quickly than someone in their 20s or 30s.

[@panyc10]

Interesting, and I tend to agree with it. A genuine curiosity though. Keeping a cash "reserve" of about 2 years of spending, may as well be around 10% of one's portfolio. This share of the portfolio is effectively earning zero and dragging on overall performance. I see why this is better than keeping 60% in bonds, but isn't the underlying suggestion that once you go into retirement the performance of your portfolio will "suffer" a bit anyway, if through cash, bonds or dividends not being reinvested?

[@chrisbourne-retirementplanner]

Yes, it can often be 8-10% of a portfolio in cash. It is frequently less though as many people have other income sources (rental, part time/casual work etc). The cash does create a drag on performance, but like you say it is still preferable to have a small amount of cash compared to a huge chunk in another low yielding asset. The main thing is though that low cash returns are a known variable and something that can be planned for/controlled. That isn’t the case with equity returns... we generally never know for certain whether we’re about to have a good run or a bad run, so removing that risk makes more sense as it gives us the ability to plan ahead with more confidence.

[@chrisbourne-retirementplanner]

@James Riddell Yes I think you've hit the nail on the head - retirement means different things to different people. Some people don't think of those things above as work - it's like the old adage goes... if you love your job, you'll never work a day in your life. For other people, retirement has the more traditional meaning that you've described.

[@chrisbourne-retirementplanner]

@James Riddell Drop me an email using the details in the About section on my channel James. That would be a better way to correspond on this.

[@DafyddMorse]

Once again, an absolute stone cold classic of a video!

[@chrisbourne-retirementplanner]

Thanks Dafydd! Straight out of the Steve Austin school of finance vids haha 😎

[@jopo8281]

Loving the wrapper strategy shit

[@chrisbourne-retirementplanner]

Haha glad it's helpful!

[@johnjones-uz4pi]

Hi Chris. I currently have 2 investment isa's going and I have a question for u. I've worked for the NHS for 20 years paying 250 per month pension. Would I be better off stopping and paying that money in2 1of my investment isa's instead? 1 isa is Vanguard LS100 and the other is 3 index funds (LS100, S&P500 & Van Global small cap). I'm 43. Many thanks.... jj

[@chrisbourne-retirementplanner]

I’m afraid I wouldn’t be able to specifically advise on this John with out understanding your full situation. The NHS scheme does provide some valuable guarantees and you would receive front end tax benefits from those contributions too. It wouldn’t actually be possible to definitively know whether the ISAs could produce a better result. You’d need to understand how your rights would be affected by not making those NHS contributions.

[@johnjones-uz4pi]

@@chrisbourne-retirementplanner Thanks Chris. I've got a big decision to make nxt financial year as if I continue contributing it'd be on the new scheme which the retirement age is 67 as opposed to 62 on old scheme. There is a 45% reduction in pension benefit income if I leave 10 years prior 2this etc. That's why I was thinking contributing 2a SIPP or to my investment isa etc. If you are familiar with NHS pension schemes etc and could help me with my ongoing strategy I'd be more than happy to have a fee consultation with you. Many thanks.... jj

[@chriswarburton1956]

Hi Chris great video. If I was to invest 20k in an ISA today any ideas of the percentage split equity/bonds or other ideas.? I'm 62..

[@chrisbourne-retirementplanner]

Hi Chris. Much depends on the timescale for investment, level of return you require, attitude to risk and capacity for loss, and other factors. Generally speaking if you’re planning on leaving it and not touching it for a long time, won’t need to access it even in an emergency and don’t mind volatility (you’re unlikely to panic during market falls), you can always expect a higher return from holding a higher content of stocks.

[@ashleyrussell826]

Top content, thanks Chris 👍🏼

[@chrisbourne-retirementplanner]

You’re welcome Ashley! Thank you for commenting.

[@nickseccombe1357]

My HL SIPP says I have to fill in a long request form for each UFPLS withdrawl, sounds painful to do monthly. So I may pull out 1 x full year with UFPLS, and also keep 1 x year of cash in the HL SIPP.

[@chrisbourne-retirementplanner]

Hi Nick. Yes unfortunately some platforms are more clunky than others! This should be easy for a platform to perform but sadly some make it hard.

[@nickseccombe1357]

@@chrisbourne-retirementplanner Thanks Chris

[@joeloughlin143]

Thanks for the video, what do you think of holding assets like gold that tend to rise as stocks fall?

[@chrisbourne-retirementplanner]

Hi Joe. Thank you! Yes gold is a useful diversifier. It’s what it does the rest of the time that’s a bit more of a concern though - no yield and quite volatile, which isn’t at all helpful in an income portfolio. It can have a place as part of the total asset mix, but it’s usually a smaller allocation holding.

[@fredatlas4396]

Could you just put say a few yrs of income in a short bond etf, like the ishares US treasurues 0-3 yrs bond index Hedged to Stirling so not affected by the currency fluctuation. I looked at the graph and this index hasn't moved much at all, extremely low volatility. And then the rest of your portfolio maybe in a 60/40 or 70/30 strategy. I realise bonds have performed better in the past, but if yields continue to rise then surely bond prices will come down. So someone retiring say in 10 yrs time may be able to buy bonds cheaper and get better returns. Personally I was thinking just take money out of pension once a year. I looked at portfolio charts and it looks like 100% equity portfolios have sometimes taken up to 12 yrs or more to recover, and even 60/40 portfolio sometimes 10 yrs to recover. What do you think about this

[@chrisbourne-retirementplanner]

Hi Fred. Yields on short dated bonds will be barely better than cash anyway, so I’m not sure the additional risk is worthwhile. Returns on cash will rise as interest rates move up as well of course. There will be better yields from high quality fixed income going forward; something we haven’t seen for some time. Interest rates increasing will only bring prices down on bonds that are already in issue - nominal values are nominal values, so bonds won’t necessarily be cheaper in future just because yields are higher.

[@davyhoogy]

Hi Chris, I have the option of a pension salary sacrifice through work. Straight away I save the 40% income tax AND save on paying less income tax for every pound I commit extra to my pension. Does it make sense to put more into this rather than vanguard stock's and shares isa's because of that 40% headstart plus they are invested for you so should see some return ontop? The downside is that I assume it will be locked away until retirement age but I plan on retiring before 60.

[@chrisbourne-retirementplanner]

You've pretty much hit all of the main points David... Salary sacrifice makes a lot of sense and you do tend to get a better net result from a pension than an ISA long term due to the upfront tax benefits (it's not always completely straight forward though, as it can depend on other sources of income you may already have in retirement). The ISA brings two very valuable things... flexibility and simplicity, which is why I always advocate having both ISA and pension. I can't advise specifically, but I would tend to favour salary sacrifice for the largest part of your available savings capacity (not completely disregarding the ISA). Remember that sal sac does reduce your borrowing capacity though because your salary physically reduces - people sometimes forget that.

[@davyhoogy]

@@chrisbourne-retirementplanner i had never considered the reduced salary having an impact on borrowing capabilities, thankyou for that. I will certainly put a little more than I currently am in my pension

[@martalewandowska9526]

Very interesting and different to what other KZbinrs I watch say! Thanks for this valuable video

[@chrisbourne-retirementplanner]

Thank you Marta. I do tend to come from a slightly different angle on some things. It’s just based on my own practical experience of managing money for clients.

[@nickfifield1]

What’s the benefit of having a cash pot inside a Sipp compared to outside ?

[@chrisbourne-retirementplanner]

Well a cash pot inside a sipp will usually have been specifically put there in preparation for retirement, but will have previously been invested. The money will have received tax relief on the way in, and some can be accessed tax free on the way out.

[@themaskedmoneysaver]

These are very good points and advice (as always) and I have always thought changing to mostly bonds 10 yrs before you need the money was strange and surely missing out on lots of company gains and lots of compound intetest gains PS-Nice to catch you on your friends (Nick) video yesterday (I subbed to him as well) He said he might be on yours soon, you never know! This is great KZbin networking for you - well done-you are getting there!!!

[@chrisbourne-retirementplanner]

Brilliant Anita! I’m glad you caught my little cameo 😊 Yeah I’m sure Nick and I will work on other things together.

[@nickseccombe1357]

Please would you put out a video on the 3 x small pot technique to expand the lifetime allowance by 30K that you previously touched on? Can I move 10K to 3 x other pension providers from my HL SIPP then cash each in via small pot? Thanks.

[@johnporcella2375]

No Lifetime Allowance now, as of prior to the GE of 2024.

[@evilzzzability]

I understand your reasoning for this, but on the flipside, just having a higher expected growth doesn't do anything to increase your safe withdrawal rate if it introduces too much unpredictability (ie volatility) into the portfolio. So, flip the question - why do you need to chase higher growth, when it could actually mean that you have to reduce the amount you are able to take from the pot?

[@chrisbourne-retirementplanner]

Hi there. But you could flip that yet again and say that perceived safe haven assets are actually higher risk because they cannot hope to produce the levels of return necessary to sustain withdrawals. That is particularly pertinent to bonds at present with the level of structural challenges they face. One could argue that the lowest risk thing to do is to retain a higher exposure to the assets with the greatest probability of achieving the required return. The important thing is managing the sequencing risk by taking withdrawals from stable assets.

[@bengunns]

I hate that Strategy as well, i am 66 and they keep pushing retirement strategy's at me.

[@BeautifulNaturalDramatic]

Very helpful and practical video 👍

[@chrisbourne-retirementplanner]

Thank you, I appreciate it.

[@stuartclark8295]

Great video! It clarified somethings that niggled me about target funds that I couldn’t put my finger on! But now I’m confused as I have a portion of my investment in a Vanguard 2045 fund! Hmm…should I switch to all in stocks? Once again Great Video.

[@chrisbourne-retirementplanner]

Hi Stuart, thank you! I would just check the asset mix... if planning on taking income in 20+ years’ time, I would personally want to be practically fully invested in equities currently. That’s me though! I’m totally comfortable with high volatility because I know I won’t be selling down for a long time. Holding bonds as well will reduce volatility so it is an individual choice.

[@sonny8085]

I'm a couple of years into paying into a Vanguard TargetRetirement fund. I'm presuming this is what you described as a product that starts off equity-heavy and then migrates over into bonds as it gets near the end of the term? In that case, do they have a product you prefer?

[@dudleyjoseph9485]

I think you are right about the Target Retirement funds. I've avoided them for this reason although it you are a long way from retirement its not immediately necessary. I've instead gone for one Lifestrategy fund. My understanding is that Target Retirement funds are based on the Lifestrategy range anyway.

[@chrisbourne-retirementplanner]

Yes, those types of strategies Sonny. I just think they’re a bit old fashioned. There isn’t a product I prefer per se, I just don’t believe there is need to systematically disinvest your equity holdings in favour of bonds just because you are approaching the withdrawal phase.

[@chrisdaviesguitar]

when you say a possible return of 6%, could it also be higher?

[@chrisbourne-retirementplanner]

Yes. Return could be higher or lower than 6%.

[@stephen6262]

Chris fantastic video Love your channel . I got a plan I will keep some money in my vanguard account to pay for fees. I'm never going to have a million but I'm hoping to have between 300000 to 400000 with no debts and spend 6 months in Spain UK/EU permitting. Maybe go part time in summer months UK fingers crossed

[@chrisbourne-retirementplanner]

Thanks Stephen! Sounds like a brilliant plan to spend part of the year in Spain. Very much like my own!

[@stephen6262]

@@chrisbourne-retirementplanner Thanks Chris

[@AndrewDCDrummond]

It took13 years to recover value from the 1929 crash - that’s a big cash buffer that a drawdown retiree would need!

[@chrisbourne-retirementplanner]

Yes it would Andrew! Those stats aren’t always accurate though - a lot of experts suggest that the road to recovery was a lot quicker than that as reinvested dividends (which in many cases were high back then), and the fact that the Dow wasn’t entirely representative of the shares that people owned, meant that the true experience would have been quicker. It’s similar with the FTSE 100… some may look at the charts and think it would have taken nearly 20 years to recover from the dotcom bubble burst, but that’s not actually true as again, it doesn’t take account of divis.

[@AndrewDCDrummond]

@@chrisbourne-retirementplanner coming round to your idea - it's covered on another channel I was looking at - but surely you would not want to withdraw from the cash buffer as then there is a risk that it would be smaller than you wanted when a crash comes and you need to utilise it? I'm 57 and realising that I could retire on my SIPP and other investments as long as sequence of returns risk doesn't hit me too badly. Been looking at golden butterfly portfolios and the MyMap fund as well.

[@chrisbourne-retirementplanner]

@@AndrewDCDrummond It's personal preference. The problem with drawing from invested units instead of cash is that you often forget, or just actively choose not to switch to cash withdrawals when markets fall because you think 'it''ll only probably be one month and won't make that much difference'... but then the falls go on for two months, three months, and so on. It's much easier to make a positive decision to 'bank gains' and top up the cash rather than do it the other way around.

[@johnjones-uz4pi]

Hi Chris loved this one. Its answered a lot of questions I've had running through my little brain 😆. Been really enjoying ur content lately. What email can I get u on to discuss becoming a Client for advice/planning etc? Many thanks and congrats on a great channel..

[@chrisbourne-retirementplanner]

Thanks John much appreciated and it’s always good to hear that content is helpful. Yes all of my various channels and email etc are shown in the About section on my channel homepage.

[@2711marcus]

Interested video Chris. 😊 It's always been a fear of mine that I'm reaching retirement my investment has grown to a million then there's a 50% crash followed by a lost decade which has happened a few times in the past and where we are now with very high bond prices and stock prices it doesn't fill me with confidence but thats just my nature. Maybe I need a FA to guide me through it 😁

[@chrisbourne-retirementplanner]

I’ll let you know if I discover a good one Mark 😂

[@2711marcus]

@@chrisbourne-retirementplanner Haha you are right up there Chris 👍

[@johnporcella2375]

According to the video, we have had, since 1929, only one period of four years of sustained losses, so we have never had a lost decade, I hope!

[@Clearwater2011]

Following this after watching your video on the Vanguard 60:40 fund which has a smoothing effect when the market is volatile So assuming you have 2 years money The 60:40 is the wrong fund ? My thoughts are 2 years money as crashes happen 60:40 as a fund or 70:30 split and manually rebalance You can A stop withdrawing income B change the source for income

[@chrisbourne-retirementplanner]

Hi Gary. Sorry, I missed this one somehow. 60/40 isn't necessarily wrong, but speaking personally I would want to hold a higher equity content. Bonds provide valuable diversification and volatility dampening benefits to those who want that tighter standard deviation range, but growth prospects look quite limited. Again, speaking personally I'll probably hold close to a 100% equity allocation all the way up to 'retirement', but will allocate cash to cover income requirements ahead of time. The world could be different then, but based on current projections I can't imagine the invested portion of my plans being less than 80/20.

[@Clearwater2011]

Thanks Chris I have 18 months in cash And 5% short term UK index linked, which hopefully won’t crash too far with the market A further 25% UK bonds and 70% n equity funds as I have just retired, the intent is to move more into bonds as this year progresses reducing exposure to US which looks over valued and keeping Uk all share fund which looks attractively priced and 10% in emerging markets

[@Clearwater2011]

@Jack Durham agreed However other markets offered a better price:earnings ratio having taken longer to rebound from the Covid correction Also the FX rate is also a consideration GB£ has been lower against a basket of currencies, due to Brexit

[@willlsmith8063]

Love you mate.always brilliant content

[@chrisbourne-retirementplanner]

Ahh thanks man that’s made my day 😀👍🏼

[@chrisf1600]

This is great Chris, thanks. I'm taking a similar approach with my own retirement (I'm 51, retiring in six months if all goes to plan). I aim to keep no more than 2 years living expenses in a combination of cash and premium bonds, a small proportion in govvies and gold, and the rest in equity. The bonds and gold are really only there for an end-of-the-world scenario (they should carry me for another 3-5 years if the stock market collapses). My plan is to sell equities to maintain that 2 year cash buffer and use up any CGT allowances etc, but to otherwise to keep my hands off !

[@chrisbourne-retirementplanner]

Excellent Chris! Sounds like a solid plan to me and I hope you enjoy your retirement. What are you planning... nice and relaxing or full of activity? Or a bit of both?!

[@theskull3838]

Chris, your doing a brilliant job but aren't you contradicting yourself? You recently did a video where you'd spoken to Vanguard and seemed to be talking up the value of having their bonds in a portfolio. I'm happy to be corrected.

[@chrisbourne-retirementplanner]

A keen observation Chris! Thank you for watching my videos I really appreciate it. I’m not anti-bonds per se... I believe they do have a valuable role to play in volatility control, and actually if I was adopting a strategy of pulling money out of a wrapper completely over a finite time period (say 5-10 years), it would be more bond heavy. Some people prefer a smoother investment journey in general, which is what the right sorts of bonds will provide. But personally I am totally happy with volatility and would prefer to have a high exposure to equities right up to, and probably through retirement. I’d like to control the amount allocated to no/low risk assets rather than that allocation be dictated to me by a lifestyling strategy.

[@theskull3838]

@@chrisbourne-retirementplanner Thank you for that Chris. Please keep doing what you're doing.

[@nickfifield1]

Similar to 2 pots

[@911ben8]

Very informative video. I’m learning a lot. I’ve heard Dave Ramsey say many times on his Podcasts, “Find an advisor with the heart of a teacher”. I think you’re the kind of guy he means 👍🏻

[@chrisbourne-retirementplanner]

That’s a great comment Ben. Knowing that my content helps people makes me want to create more. Thank you so much.

[@davidkelly1507]

I don't follow at all hahaha

[@roconnor01]

I think I will continue to follow the advice of Jack Bogle, the man who founded the second largest investment company on the planet,which currently has $7.2 trillion under management.

[@hopeful8585]

When you said you hate that strategy, you earned my thumbs up!👍😊

[@chrisbourne-retirementplanner]

Haha glad it hit the right note for you! 👍🏼

[@Sabhail_ar_Alba]

It took S&P 500 6 years to recover from the dot com crash - none the less, this is good advice.

[@chrisbourne-retirementplanner]

Thanks for your comment! This is actually a mistake that many people make... Stock market charts only show an index price, they do not account for reinvested income. On the same basis, you would say that the FTSE 100 index took 15 years to recover from the same, but it wasn’t actually the case in monetary terms.