Tacpot12's Retirement Income Portfolio Review 2021
Posted: July 31st, 2021, 7:33 pm
This is my first published review of my real life retirement income portfolio, as of 25 May 2021. The objective of the portofolio is provide 80% of the income I needed to support my early retirement, to increase this income inline with with inflation, and to leave maintain this income through to age 100, when combined with my state pension and DB pension entitlements which kick in at 62, 65 and 67. The other 20% of the income I need comes from a flat that I rent out and a house that was rented until last year, when I sold it and am slowly feeding the proceeds into a Stocks & Shares ISA. The ISA and the GIA that feeds it are not reported in this review.
I retired in September 2017, aged 53, and started to drawdown my pension in May 2019 when I reached age 55. I started and finished building the retirement portfolio in an AJ Bell SIPP during February 2018, migrating a Scottish Widows Personal Pension, a L&G Personal Pension left over from a previous employment and DC pension from my last employer. Between February 2018 and May 2019, the income was left to accumulate and create a cash buffer in the SIPP. This cash buffer was reduced from £14K to £10K in 2020 when I took the opportunity to purchase more shares in the one of the two EFTs in the portfolio at a very good price following the market response to the pandemic.
The portoflio is designed to be a buy and hold, although I did take the opportunity to buy the AJ Bell shares available to me as a customer when they had their IPO, but sold these quite quickly for a good profit.
I took financial advice about moving two DB pensions from previous employers, but the advice was not to move them, and I was happy to take this advice. (CETVs were £30K and £40K),
For reporting purposes I use close of business on 25th May as the cut off point for valuations and income.
The portfolio consists of 2 growth focused ITs, 13 income focused ITs, 3 Unit Trusts (one of which does not pay any income) and 2 EFTs diversified across markets and themes (20 holdings in total), consisting of:
Equity Growth: Scottish Mortgage Trust (SMT), Finsbury Income & Growth Trust (FGT)
Bond Growth: Schroder Long Dated Corporate Bond UT (0956932)
UK Equity Income: Edinburgh Investment Trust (EDIN), City of London (CITY), Mercantile (MRC), JP Morgan Claverhouse (JCH), Invesco Perpetual UK Smaller Companies (IPU), iShares UK Dividend ETF (IUKD),
UK Equity/Bond Income: Henderson High Income Trust (HHI), Invesco Bond Income Plus (BIPS), AXA Framlington Managed Income UT (B71DB36)
International Equity Income: Bankers(BNKR), JP Morgan Global Growth & Income (JGGI), European Asset Trust (EAT), North America Income Trust (NAIT), Schroder Oriental Income Trust (SOI)
International Equity/Bond Income: Artemis High Income UT (B2PLJN7)
UK Property Income: BMO Commercial Property Trust (BCPT), iShares UK Property ETF (IUKP)
I've rebased the portfolio's starting value to £100,000 for these reports, so all the figures below are pro rata to that amount. I am publishing data for the three full years that I have data for:
Income Performance
My initial forecast for yeild was 3.14%, pa but the actual yeild was above 3.9% for the first two years, then dropped to 3.77% due to the pandemic. I think this relatively small drop shows that Investment Trusts were willing and able to use capital reserves to support dividends to a small degree. Over the three years, the average yeild is 3.88%.
Capital Performance
My initial forecast for capital growth was 3% pa, but average growth over the three years has been lower at 2.38%
So my total return to date is 6.26% pa.
Comments and questions are apprecaited.
I retired in September 2017, aged 53, and started to drawdown my pension in May 2019 when I reached age 55. I started and finished building the retirement portfolio in an AJ Bell SIPP during February 2018, migrating a Scottish Widows Personal Pension, a L&G Personal Pension left over from a previous employment and DC pension from my last employer. Between February 2018 and May 2019, the income was left to accumulate and create a cash buffer in the SIPP. This cash buffer was reduced from £14K to £10K in 2020 when I took the opportunity to purchase more shares in the one of the two EFTs in the portfolio at a very good price following the market response to the pandemic.
The portoflio is designed to be a buy and hold, although I did take the opportunity to buy the AJ Bell shares available to me as a customer when they had their IPO, but sold these quite quickly for a good profit.
I took financial advice about moving two DB pensions from previous employers, but the advice was not to move them, and I was happy to take this advice. (CETVs were £30K and £40K),
For reporting purposes I use close of business on 25th May as the cut off point for valuations and income.
The portfolio consists of 2 growth focused ITs, 13 income focused ITs, 3 Unit Trusts (one of which does not pay any income) and 2 EFTs diversified across markets and themes (20 holdings in total), consisting of:
Equity Growth: Scottish Mortgage Trust (SMT), Finsbury Income & Growth Trust (FGT)
Bond Growth: Schroder Long Dated Corporate Bond UT (0956932)
UK Equity Income: Edinburgh Investment Trust (EDIN), City of London (CITY), Mercantile (MRC), JP Morgan Claverhouse (JCH), Invesco Perpetual UK Smaller Companies (IPU), iShares UK Dividend ETF (IUKD),
UK Equity/Bond Income: Henderson High Income Trust (HHI), Invesco Bond Income Plus (BIPS), AXA Framlington Managed Income UT (B71DB36)
International Equity Income: Bankers(BNKR), JP Morgan Global Growth & Income (JGGI), European Asset Trust (EAT), North America Income Trust (NAIT), Schroder Oriental Income Trust (SOI)
International Equity/Bond Income: Artemis High Income UT (B2PLJN7)
UK Property Income: BMO Commercial Property Trust (BCPT), iShares UK Property ETF (IUKP)
I've rebased the portfolio's starting value to £100,000 for these reports, so all the figures below are pro rata to that amount. I am publishing data for the three full years that I have data for:
Income Performance
My initial forecast for yeild was 3.14%, pa but the actual yeild was above 3.9% for the first two years, then dropped to 3.77% due to the pandemic. I think this relatively small drop shows that Investment Trusts were willing and able to use capital reserves to support dividends to a small degree. Over the three years, the average yeild is 3.88%.
Capital Performance
My initial forecast for capital growth was 3% pa, but average growth over the three years has been lower at 2.38%
So my total return to date is 6.26% pa.
Comments and questions are apprecaited.