Preservation of AVC value before retirement
Posted: March 14th, 2018, 11:57 am
Good morning.
I won’t be retiring for at least 15 years but I’m already over-thinking how I’d manage my additional voluntary contribution (AVC) investments. I’m fully aware that rules will change but I was wondering if anyone could kindly give me some ideas based on current legislation.
Age: 45
Pension: 20ish years accrued in the local government defined benefit scheme (career average since 2014). Plus monthly AVC contributions - 100% Prudential equity funds.
Other investments: A low 5 figure sum in a shares ISA. I plan to increase my contributions over 20 years to give me another option at retirement.
When I am close to retirement my preferred option as of now is to take a lump sum including the entire AVC ‘pot’. How would I ensure that the value of the AVC investments does not fall immediately before I take the lump sum?
There are ‘lifestyling’ options available via the AVC provider, but would it make more sense for me to independently gradually move from 100% equities to money market/index linked bonds etc. over a 5 year period before I retire? Or move e.g. 50% out of equities to less risky assets when I guesstimate that the stock market is at a high?
I would assume that if I moved the AVC investments to a SIPP that I would have to cash in the investments and repurchase depending on my investment strategy.
How have other people retained the value of their AVC contributions?
Thank you.
I won’t be retiring for at least 15 years but I’m already over-thinking how I’d manage my additional voluntary contribution (AVC) investments. I’m fully aware that rules will change but I was wondering if anyone could kindly give me some ideas based on current legislation.
Age: 45
Pension: 20ish years accrued in the local government defined benefit scheme (career average since 2014). Plus monthly AVC contributions - 100% Prudential equity funds.
Other investments: A low 5 figure sum in a shares ISA. I plan to increase my contributions over 20 years to give me another option at retirement.
When I am close to retirement my preferred option as of now is to take a lump sum including the entire AVC ‘pot’. How would I ensure that the value of the AVC investments does not fall immediately before I take the lump sum?
There are ‘lifestyling’ options available via the AVC provider, but would it make more sense for me to independently gradually move from 100% equities to money market/index linked bonds etc. over a 5 year period before I retire? Or move e.g. 50% out of equities to less risky assets when I guesstimate that the stock market is at a high?
I would assume that if I moved the AVC investments to a SIPP that I would have to cash in the investments and repurchase depending on my investment strategy.
How have other people retained the value of their AVC contributions?
Thank you.