How much can I draw down?

Chickereeeee

Imastu wrote: »

Remaining pot would therefore be around £400,000.

Does that make sense? Are there any restrictions at that point on how much can be taken flexibly? The whole lot in one go?

Under that scenario, and current rules, you WILL be paying the higher tax rate (which was my point above) under flexible drawdown...

Imastu

Many thanks - it confirms that I can take the whole of the balance (after a guaranteed £20k annual income) under flexible drawdown, i.e. realise in cash the value of the pension pot - which is helpful and gives so much more flexibility (hence the name I guess).

In terms of how much at a time, is an actual withdrawal under flexible drawdown from the SIPP treated as income in the tax year, and therefore taxed? It's probably obvious, but I genuinely had not appreciated that.

So taking into account the £20k annuity income, the maximum one can take out and still remain a lower rate tax payer is only around £24k in any one year after age 67?

Might have to think this through a bit further - whether 'tis better to pay 40% (or 45%) tax and have the cash out, or leave it in and withdraw it over time, effectively maximising the annual income at the 40% tax threshold - which is pretty much what the opening post is saying...:o

As mentioned, there is the 25% lump sum (definitely to be done), plus the current Mrs I (and use of her tax allowances, e.g. interest on the lump sum can be tax free if I give it to her) to factor in. But I think I'm clearer on the requirements to work out a plan - many thanks.