Hi there i am close to retiring and have been testing SPA3 Investor out as a potential part of managing funds in my SMSF (have to say very happy so far) -
My question if i am fully invested via SPA 3 Investor equal weighted strategy and it has me in all open positions how do i take out the required amount to fulfil my pension phase requirements of a SMSF in retirement?
For example if i have 500K fully invested and i have to pay myself 5% pa so $25K how do i work out what actual stock to sell and maintain the integrity of the equal weighted strategy?
Thoughts most welcome
Cheers Steve
Hi Steve
In my opinion (not advice) I would leave cash for income out of the portfolio to begin with and invest the residual. Too messy otherwise.
Not Advice.
The easiest answer is to put aside your pension for 12 months together with accounting fees and expenses that you are likely to incur for the year and then use the balance to put into SPA3 Investor. You can then rebalance each year. You also need to have your investment strategy defined as per SIS regs etc to ensure you are acting correctly. It may be worth running it past your accountant.
I was faced with the same situation 3 years ago when I started with Spa 3 Investor portfolio in my SMSF. I kept 12 months of income in cash in a bank account and committed the balance of my funds to my Spa3 Investor portfolio in the USA market. When I was coming to the end of my cash balance, the next time I received sell signals, I would keep the required amount for the next year in cash and not reinvest in a further buy signal. The cash amount in my portfolio would then be transferred from my SAXOTRADER account to deposit the funds to my SMSF Bank account. Works for me,
I retired in 2020, so in the middle of the sell off; my way of operating is to keep at least 1-2 years income requirement as cash in my SMSF separately from the investment process. Periodically (every 4-6 months ) when the market is high, I sell a small percentage of my holdings to top up the cash so I always have my foreseeable income needs met.That hopefully will enable me to avoid the need for enforced selling in a bear market so the system can continue to operate as intended.I have no intention of trying to rely on dividends or interest for income as that is no longer an effective strategy.Fortunately the SWS method provides a practical alternative by concentrating on growth.
thank you to all for your thoughts - appreciated