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Planning retirement in the UK

Planning retirement in the UK

Old Oct 15th 2020, 10:06 am
  #16  
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Default Re: Planning retirement in the UK

Neither of our children are in the least bit interested in moving funds about and balancing to an AA so both of them when they started work on their 20s directed all their income into a target retirement fund which is a fund of funds that automatically rebalances and also changes the AA as they get older and closer to retirement.

My wife is of the same mindset so we put all her Roth into a fund of funds with a fixed AA that automatically rebalances and her advice from me that when I die and she inherits my Roth accounts that she simply moves the money into the same fund. The fees are really small because you are not paying for a manager to chase returns, simply moving money between funds to maintain the target AA.
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Old Oct 15th 2020, 10:54 am
  #17  
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Default Re: Planning retirement in the UK

Originally Posted by durham_lad View Post
Neither of our children are in the least bit interested in moving funds about and balancing to an AA so both of them when they started work on their 20s directed all their income into a target retirement fund which is a fund of funds that automatically rebalances and also changes the AA as they get older and closer to retirement.

My wife is of the same mindset so we put all her Roth into a fund of funds with a fixed AA that automatically rebalances and her advice from me that when I die and she inherits my Roth accounts that she simply moves the money into the same fund. The fees are really small because you are not paying for a manager to chase returns, simply moving money between funds to maintain the target AA.
Agreed, still it pains me to pay a premium for someone else to balance my portfolio when it takes me about 10 minutes a year and will cost me over $1,000 a year in additional fees to do so (though that number will become lower each year as we spend our portfolio down). $1,000 is still a lot of money to me!
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Old Oct 15th 2020, 11:47 am
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Default Re: Planning retirement in the UK

Originally Posted by GOALFIRE View Post
Agreed, still it pains me to pay a premium for someone else to balance my portfolio when it takes me about 10 minutes a year and will cost me over $1,000 a year in additional fees to do so (though that number will become lower each year as we spend our portfolio down). $1,000 is still a lot of money to me!
A Vanguard target retirement fund of funds is going to cost around 0.13% per year as opposed to index funds of less than 0.1% (VTI is 0.06%)

so yes, I agree with you. If you had individual funds that you balanced yourself the fees on £100,000 investments would cost about £100/year but a balanced fund would cost £130/year.

A £1m portfolio is going to cost you about £1,000/year to manage yourself and £1,300/year if you put it in a Target Retirement fund and let the Vanguard computers do the re-balancing for you.

https://investor.vanguard.com/mutual...th-end-returns

Last edited by durham_lad; Oct 15th 2020 at 12:09 pm.
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Old Oct 15th 2020, 9:57 pm
  #19  
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Default Re: Planning retirement in the UK

Originally Posted by durham_lad View Post
A Vanguard target retirement fund of funds is going to cost around 0.13% per year as opposed to index funds of less than 0.1% (VTI is 0.06%)

so yes, I agree with you. If you had individual funds that you balanced yourself the fees on £100,000 investments would cost about £100/year but a balanced fund would cost £130/year.

A £1m portfolio is going to cost you about £1,000/year to manage yourself and £1,300/year if you put it in a Target Retirement fund and let the Vanguard computers do the re-balancing for you.

https://investor.vanguard.com/mutual...th-end-returns
Yes, the difference between 0.13% and 0.10% expense ratio is not 'much' but VTI is 0.03% and total bonds is 0.05% so as a percentage doesn't look like a lot but it adds up. I could go all in on Balanced (60/40) to minimize the cost as it's close enough to my glidepath AA.

First World problem I suppose and 99.99% of the worlds population would trade with me I'm sure!
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Old Oct 16th 2020, 7:45 am
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Default Re: Planning retirement in the UK

Originally Posted by GOALFIRE View Post

First World problem I suppose and 99.99% of the worlds population would trade with me I'm sure!

I fully agree. We are indeed very fortunate.
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