Page 36 - DIY INVESTOR MAGAZINE - NOVEMBER 2018
P. 36

        MONTHLY INCOME AT VARIOUS PORTFOLIO VALUES AND YIELDS
IF ALL GOES TO PLAN THEN YOU’LL PASS ON YOUR PORTFOLIO AS A LEGACY TO YOUR HEIRS
That may make it worth switching your provider as
a platform that offered competitive rates in your accumulation phase becomes comparatively expensive as you deaccumulate.
Also note that it can be more cost effective to sell your ETFs quarterly, or annually, as opposed to monthly. For example, if ETF dealing fees are £10 per trade then it’ll cost you £40 to sell an ETF every quarter versus £120 monthly.
You could consider consolidating your holdings too if that will reduce trading costs. For example, you could hold a global equities ETF as opposed to separate US, UK, Europe and Pacific ETFs.
Cost savings become especially important at relatively low withdrawal amounts and can easily outweigh the potential gain of keeping money invested for a few months longer.
         ETF WITHDRAWAL STRATEGY COSTS
UK platforms do not usually offer automated withdrawal plans for ETF portfolios*. Instead, you must execute sales manually in line with your income needs. As
ever, you need to keep your costs as low as possible. Specifically, watch out for:
1. 2.
ETF dealing fees - applied on every trade. Drawdown fees - administrative charges levied when you take income from your SIPP. They are
usually applied annually and some platforms apply additional one-off charges.
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