Retiring at 50 - is drawdown best option?

cyclonebri1

begbeer wrote: »

Cyclonebril, 100k pension pot at 50 is a lot more than most people will get unless of course you are in the public sector!!

Sorry don't agree, the pot size is down to you, the individual, regardless of whatever sector you work in.

jamesd

No worries, personally I'd take the lump sum and put the pot into drawdown to preserve your option to take pension income between ages 50 and 55. Then if you don't need the money, invest it in exactly the same way as you have it invested now. Be sure to put the lump sum into the S&S ISA wrapper as fast as you can so you don't lose out on the tax wrapper aspect.

You do not lose out to the one bite at the lump sum cherry argument if you do this because the 25% and the 75% are both increasing or decreasing at exactly the same rate as they would have done inside the pension if you hadn't done it.

You do potentially lose out on the transfer of the pension pot to beneficiaries if you die, compared to the situation if you hadn't taken it, but if you have a spouse who would want the money placed into their own pension pot the effect is likely to be minimal to none.

£575 as a one off fee IFA with a 3% initial fee and 1/2% thereafter seems a bit high for this pot size, though perhaps not if you're in a high cost area like London and the SE. If you need ongoing investment advice and service the 0.5% is normal enough if you think you're getting £500 a year worth of service, though maybe a little flexible. The fixed fee and 3% may have more room for negotiation if you're not planning to change investments, so there's no work to do on that side of things. I'm assuming that the 0.5% is coming from the annual charge on investments and isn't additional to that.

It sounds as though your IFA is suggesting an appropriate course to preserve your retirement options.

[Deleted User]

cyclonebri1 wrote: »

£100k pension pot at 50 seems poor, very poor, sorry, just trying to be honest.

What extra funding is in place for your retirement????????????????????????

I completely agree with this post. Tbh a better pension pot is at least 3 to 4 times this and this is for someone retiring at 60 and even then, that amount will only enable a comfortable but basic standard of living

[Deleted User]

I can give you a small example of a pot in drawdown and that is my own very small pot. I do manage a very large pot as well but I am only talking about mine, which was 29k at vesting three years ago. I took the tax free cash and enabled a pension cheque in arrears once a year. The amount will give us just one european foreign holiday for 2 for two weeks. I have ensured that there is always a flow of cash back into the sipp so that the amount will cover the drawdown and more besides and I do this by various bonds and dividends. I have been lucky enough to have had capital growth over the 3 years so today my pot stands at a value of 28k

Imagine such a small amount of drawdown year on year and imagine how inflation could spiral. Then be realistic op. 100k will not go very far at all, particularly if you have advisor charges. Personally I would leave well alone until you are 60

whiteflag_3

kittie wrote: »

. Tbh a better pension pot is at least 3 to 4 times this and this is for someone retiring at 60 and even then, that amount will only enable a comfortable but basic standard of living

Can you expalin this, as surely its impossible to say without knowing the persons circumstances, other assets, lifestyle, standard of living etc.

Ive got a client with a pension pot of £80K , is that not enough?