2 questions

stu12345_2

how do arrange the deaccumulation of a pension say over 20 yrs so it runs out on a certain date and your not interested in protecting the capital, you want to spend it all, annuity or drawdown

as for example btl landlords at some point sell the house to allow them to spend the capital. but throu a dc pension , whats best.

also how to you retire early and use your dc funds to live on till state pension kicks,and a final salary pension in as an annuity pays too little spread over too long. can you get an annuity that lasts 12 yrs max between 55 and 67 , rather than risk a 12 yr drawdown to spend capital, eg i need approx 100000 to live on between 56 and 67, if i had that dc fund, how do i spend it that it pays out say 9000 a yr min for 11 yrs

jamesd

For drawdown you estimate the investment return and draw a level of income that causes that to run out at the end of the time. Adjust as appropriate based on how returns turn out in practice.

There are fixed term annuities but the market is small and they tend not to be even remotely good value for money. You might not get back even the amount spent to buy the annuity.

Is your problem that you don't know how to create a spreadsheet to do the calculations you need? If so, someone can probably explain.

stu12345_2

i read an article too many folk live of the dividends and die with capital intact, where they can have a better life exhausting the dividends and capital, many ideas i have, such as if i have an annuity ill get housing benefit, council tax reduction even with a small db and £148 state pension, i believe you should pay as you go in life.eg dont own a 60000 flat like i rent from council as if i buy it i cant downsize its 1 bedroom anyway,and equity release say its too cheap.id die with a asset that i cant exactly take a brick or two to tesco to pay for my shopping can i.
if i drawdown my capital will prevent me,as my fund will prob be over 10000, preventing any top ups, also being swallowed up in care fees.
im spending a good bit of my wages on my dc fund at mo. as i plan to exhaust between 56 and 67.as annuity will be too small weekly to support me, eg too much money from aged 67, not enough beforehand.if gov had forced us to buy annuities, i would buy one at 67, but spend isa or wages or savings between 55 and 67.
so if you can only raise say 100000 in a dc fund, best draw it down from 55 to 67, then get state pension, housing and council tax help, seems the best way

worry is if i get to 54 and next gov say you have to buy annuity then that will ruin things as cant survive on a 30 yr low payment, need higher between 55 and 67.
hence i may give up pension and stick to stocks isa incase future gov changes rules, but rules should be adhered to to those that started the plan in 2015 knowing they can avoid annuity in 10 yrs time.

kidmugsy

Have a look at

http://wpfau.blogspot.co.uk

http://theretirementcafe.blogspot.co.uk

stu12345_2

there are too many websites showing you how to grow fund but few how to spend every last penny.
and if you take an annuity it cancels out any housing or council tax benefits , even with max state flat rate pension,even more so if in drawdown,

i told my workmate that if you save into a dc fund at say aged 50, take it at 67,you are only self funding your own housing and council tax benefit.
an ifa said to me either have huge pension or no pension, cos if in middle even with flat rate pension and rent as 8 million of us do, your only self funding your benefits.
if i want an income of 12500 a year i just need state pension small db fund and housing and council tax benefit, hence spend my dc fund between 56 and 67. as any benefits at 67 are worth a 100000 index annuity, eg 70 a week rent and 25 aweek council tax help.
so i get my own 100000 dc fund between 55 and 67 which i spend, then at 67 a 7500 a yr state pension, and 5500 council tax and housing benefit and 1000 a yr db fund. ive plugged in the numbers into entitled2 website.
and if anyone complains that im wrong, if cancel dc pension contributions now and just save into shares isa which id spend between 55 and 67 as there seems to be no stigma in spending an isa, even less so than spending wages till 67, enjoying wages if work till 67 and getting full entitlement at 67 as ive def accrued 35 yrs cont and rightfully entitled to council tax,housing benefit as many of my pensioner neighbours have that retired at 60 in the last few years in housing and council properties

eastcorkram

stu12345 wrote: »

i told my workmate that if you save into a dc fund at say aged 50, take it at 67,you are only self funding your own housing and council tax benefit.
an ifa said to me either have huge pension or no pension, cos if in middle even with flat rate pension and rent as 8 million of us do, your only self funding your benefits.

That is EXACTLY the reason, that I am saving into a pension fund. So that I can fund myself without using benefits!!! Hope that is OK with you.

stu12345_2

this is a dilema very few newspapers websites have discussed, they all say 7500 is all you get at 65, no its not you get say another 5000 plus via housing and council tax benefit as the millions of renters that are retired at mo, and home owners on state pension who get council tax benefit as their value of their home isnt classed as cash or private pension.
hence that alone as an annuity is worth 100000 at least, no wonder folk dont save and enjoy their wages till 65.
and now you can get your pension at 55,no annuity, run out at 65 and then get gov annuity worth 100000, same as those that saved in an isa and spend it,or had no savings and enjoyed their wages to the full, made sure it ran out exactly at 65, and had no more than 10000 in savings, the limit for pensioners to have to still get benefits.
they call it the race to the bottom i believe.

aviva do show a drawdown plan that you can include all funds, eg small db pension, current dc fund, state pension, housing and council tax benefit, basically all forms of income that you can use as an income.

someone on a forum posted the fact that if you take say a small level based annuity instead of drawdown, that potentially still allows some housing and council tax benefit, the gov may see that as deliberately avoiding where you start with large fund, which will be more than the 10000 limit for benefits for pensioners and thus say hey were ignoring your annuity and converting it back to a lump sum in our calculations.

the guardian newspaper picked up on that, annuity can then be more useful than drawdown

thus drawdown between 55 and 65, or if your 65 , pick annuity instead of drawdown, or retire at 55 spend isa between 55 and 65, or save nothing but work till 65, to get max possible money during your life

say i was 64 today and had no private pension, give up work at 65 continued rented in a housing association bungalow, got full state pension, housing and council tax benefit for next 20 yrs, i live in a street full of pensioners that rent, but get top ups, they are happy on their 12500 a year total income, what do you tell them, hey next election all you 4 million retired renters are evicted, i dont think so.
i have retired uncles and aunts in housing association properties in their late 60s, they dont seem at all worried they never donated into a private pension when they worked. they have almost the same income as when they worked now. thought the goal was retire on 2/3rds of your income, well they are on it, without a private annuity. ok they retired at 60, not 65 or 67, but if thats the case then save enough in an isa to live on between 60 and 67, retire at 60, and repeat as current retirees in my street.

stu12345_2

i agree someone at 18 can put a good amount away for 10 yrs and let it grow will blow away any housing or council tax total in 50 yrs time, but what advice do you give someone aged 60 with no private pension, that maybe rents housing association, bet its completely different.

as i said even an ifa would not advise someone renting housing association to start a private pension with only 5 years till retirement, id say use an isa to save to reach 10000 max and still be entitled to housing/council tax benefit.

there must be a tipping point age when it is foolish to start a private pension, especially if you rent.

such as myself concerning mortgage it may be foolish to start one at my age nearly 50,as mortgage wont be finished until after retirement and as for ongoing repairs when retired, no way, better renting council with full maintainance and also full housing benefit, you cant take it with you as they say.

as for those that build up pensions and live frugally using the dividends only and not dig in to the capital to enjoy it, only donate it to next generation that dont have to graft as hard, seems the first generation graft and its passed down, no wonder some folk are wondering when will their parents will pass away and what their pension and house is worth.
isnt that what the gentry do, live in cold mansions, so their kids get it and their kids and their kids.

why cant each generation work hard and then spend hard when retired, fully using all their cash they grafted for, a cycle that makes more sense.
so between 18 and 50 u save/invest, then 50 till death you spend fully, and then the next generation repeat and so on.
so if you have kids, tell them there will be no inheritance, house will be sold and you will rent,or equity release,and pension will be fully spent and enjoyed, but teach them how to invest and what occupation to choose so they can do the same as you, pass on your knowledge, not your wealth.
and if you blow it and live till 100, then by that point, you can go live with your kids or grandkids, cos they will have good funds by that age, if not just claim housing and council tax in ur rented house.

my parents used their wages buying nicer and better houses during their life, scared to sell up now and rent or equity release, cos it would affect my inheritance, i have another almost 20 yrs of work left in me, my folks struggle with their gas bill.
if they had kept their fully maintained council house,instead of buying newer and better houses, on costly mortgages, repairs, insurance, etc they could have afforded gas bill and prob have more cash savings, forget inheritance, i say

mgdavid

I don't have a clue what your point is but you do seem to be having a good discussion with yourself...

stu12345_2

my point is how to fully spend every penny, be it if it will only last till 65 or 100 and the consequences and was it worth even starting one at various ages.

mgdavid

stu12345 wrote: »

my point is how to fully spend every penny, be it if it will only last till 65 or 100 and the consequences and was it worth even starting one at various ages.

it entirely depends on whether one thinks it desirable to be very poor in old age, which it appears you may do. On this forum I'd hazard a guess that you are in a minority (of 1).