Retirement Planning

Darkstar

I want to test out my plan for retirement.

When I reach 65 I will receive a DB pension worth in the region of £1,500 per month. Then when I reach 67 I will get at least £500 from the state. I consider £2,000 per month way more than I need and a lot more than I have disposable now after I have paid the mortgage.

I also have a reasonable DC pot that I plan to use to fund my retirement from age 60 to 65 at £2,000 per month, and then from 65 to 67 at £500 per month. If my DC fund shrunk by 2% per year during this period I would have used less than half of it.

Any money left in DC pot after I turn 67 can fund extravagant treats, holidays etc.

Is this general idea workable. I will need to monitor my DC pot between now and my 60th birthday but I though I would test the water. Mortgage will be paid off before I turn 60.

greenglide

Both the DB pension and the state pension are, of course, taxable so deduct 20% for everything over £10,500.

Of course you may have already taken this into account ...

Darkstar

You guessed it, I have done it, although I worked with £12,000 as we are promised £12,500 by the end of this parliament which is more in line with my retirement term.

I have also assumed I can take 25% of my DC draw down tax free each year. I don't plan to take a the full 25% on day one.

bigjim7uk

I have a pot of 200K which I want to draw down over 13 years, why should I be charged to draw down my own money. It's bad enough being taxed but to pay administration charges on top is not right.

atush

Well right now it isn't really your money, it is held in trust for you. Part of the deal for your tax relief and tax free growth.

And you want it held for 13 years, I assume invested for DD. Which carries a risk of complaint (as you didn't buy an annuity) which means there is a risk to whoever helps you with DD.

So you should at least expect to pay what you would for a S&S isa. With some risk premium on top.

greenglide

I have a pot of 200K which I want to draw down over 13 years, why should I be charged to draw down my own money. It's bad enough being taxed but to pay administration charges on top is not right.

A lot of providers don't charge for putting a plan into drawdown and don't necessarily charge for each withdrawal but somebody has to pay for the administration of the scheme. It has nothing to do with tax or anything like that, in drawdown the fund is still invested (hopefully) and the normal fees for the provider / platform continue to be payable.

kidmugsy

bigjim7uk wrote: »

I have a pot of 200K which I want to draw down over 13 years, why should I be charged to draw down my own money. It's bad enough being taxed but to pay administration charges on top is not right.

Oh I know: isn't it terrible that people expect to be paid for the work they do?