Only freedom will do

Watty1

Interesting calculation. My pension pot is coming along nicely - well actually its rather empty but I'm counting the equity in our other house! Need to research capital gains on that one though. Bet that will wipe out a chunk of it.

edinburgher

Watty1 wrote: »

Interesting calculation. My pension pot is coming along nicely - well actually its rather empty but I'm counting the equity in our other house! Need to research capital gains on that one though. Bet that will wipe out a chunk of it.

I was just assuming pot = annual expenses x 25 (4% SWR).

Secret_Saving_Squirrel

But if Al's spending now is £26k with loads of pets and children, it will be much less in retirement so the pot won't need to be so huge?

edinburgher

Probably, but I can't tell Al how much she is spending, she'd need to estimate the new figure

Secret_Saving_Squirrel

Of course she may be planning a very luxurious old age.....

unhappy_shopper

edinburgher wrote: »

I was just assuming pot = annual expenses x 25 (4% SWR).

Thanks for the info.
It is a nice and easy short-cut to remember when thinking about pension.

edinburgher

SWR means the pot never runs out (in theory). Good for leaving something to the kids, not so good if they're wee gits and you want to leave them nowt :rotfl:

Alchemilla

Now my ears are burning!

Mr Al has the same length of service but is older.

If I went now I could draw 20/80ths (or at 50 27/80ths )which is about 10k but not until I am 60.

We will still have DH's salary until he is 62 which would cover living expenses.

Then he will retire and have about 16k. So there is an income gap for me between age 55 and 60.

However there is a lump sum of 20k for each of us which I think will be bigger on retirement.

Living expenses are likely to go down not up and alternative income is likely to go up not down.

edinburgher

Unless lump sum comes from AVCs, I wouldn't recommend it. I believe received wisdom is that defined benefit pensions should be taken as larger payments, not smaller payments + lump sum?

Alchemilla

I think the lump sum is standard. I dont think you can take it all as payments?

Oh I am !!!!less and clueless.

I hadn't factored in AVCs so that is a bit extra.