Expert: Paul Henneman - 7/12/2006

Question
Paul

I am a 52 year old sinlge man living in London, England and working for our Civil Service. It's likely that I will be early retired within the next year. I would receive a satisfactory pension and lump sum. My only debt is a small  morgage (16,000 GBP) which finishes next May and is not of any concern. But I have fairly large (about 120,000 GBP) savings in stocks and shares and manged funds (unit trusts, PEPs, ISAs etc); mostly medium risk and blue chip. Which of these, if any, should I automatically cash in when I retire? How does one's portfolio differ when one is retired early? Should I just carry on regardless? (I have no plans yet to take off round the globe, but even if I did my cash savings could finance that.) Many thanks for your time and expertise.

Answer
Rafey,
   Thank you for your question!
   I believe that the true answer to your question is not so much a function of retirement, but more of age. You are young to retire, and will likely need funds for decades to come. Because of this, I would recommend that you continue your investments in the same way as you have in the past. As you get older, perhaps 70 or more, and assuming that you are still in a strong financial position, you would begin to move towards a more 'wealth preservation' mode and very conservative investments. At an older age, you simply do not have time to recover from times of poor returns. However, at 52, things should really be much the same as when you were 35 or 45. So my quick advice would be to carry on with what has been working for you!
  I hope this helps! Please do not hesitate to follow up with me if I can provide any additional specifics,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
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