Sipp

redvalley

Hi. Any idea what income I should expect from a SIPP value of around £480k? I am 66 years of age.

Thank you

Dazed_and_confused

Annuity?

Drawdown with TFLS in one go?

Drawdown with TFLS as part of each withdrawal?

Is it invested within the SIPP? If so what in.

Brynsam

Google on 'annuity rates calculator', pick the one you most like the look of and enter relevant details about the sort of income you are considering (own life, level or increasing etc) to get your answer.

Remember that if you have any health issues, you may qualify for better rates. You'll need to ask for quotes based on your specific health issues.

balbs

Nothing wrong with other posts, but the answer to this question depends on a lot of other questions: do you have other pensions such as final salary, whats your attitude to risk, would you consider taking out an annuity to guarantee an income with some of this money, do you want to tax free element now or spread it out (and what does your SIPP provider allow you to do?) to name but a few. Take your time and do a lot of research.

tacpot12

You should be able to draw an income of about £20K pa for a number of years, but when this will run out will depend on what you are invested in and how the markets perform. It might all be gone after 15 years, or you might have a pot worth several million pounds after thirty years.

The availablity of other income streams such as rental income from property, a workplace pension or state pension can have a big impact on the money you need to withdraw to live on, so factoring in any other income is important.

There are some online simulators available (e.g. https://www.firecalc.com/) that allow you test how long your pot might last using the historic stockmarket conditions from every previous year and a certain level of income and a certain timeframe. They will provide a result along the lines of:

If you withdraw £2000 per annum, there is 0% chance of running out of money before you are 100
If you withdraw £10000 per annum, there is 0% chance of running out of money before you are 100
if you withdraw £20000 per annum, there is a 3% chance of running out of money before you are 100
If you withdarw £30,000 per annum, there is a 25% chance of running out fo money before you are 100.
If you withdarw £40,000 per annum, there is a 100% chance of running out of money before you are 100.

Firecalc allows you to provide details of other income streams and takes these into account.

Just be aware that even if these simulators support a certain level of withdrawal, you pot still may run out prematurely. This might happen if you don't enter the right data (e.g. you omit charges that affect your investment return) or if the stockmarket declines to a degree that has never been seen in its history.

Hope this helps

Paul_Herring

If you're after a ballpark (i.e. not too accurate) figure, use 4% of the total (£19k)

Naturally there are lots of variables to tie that down to a more accurate number -see the other posts for examples.

dunstonh

Any idea what income I should expect from a SIPP value of around £480k? I am 66 years of age.

Zero. SIPPs do not make money or earn income.

it is the investments you use within the SIPP (or other pension types) that do that. Without knowing the investments you are going to use, there is no way to answer your question.

Broadly speaking, the lower the investment risk you take, the lower the sustainable draw rate is likely to be.

Thrugelmir

tacpot12 wrote: »

There are some online simulators available (e.g. https://www.firecalc.com/) that allow you test how long your pot might last using the historic stockmarket conditions from every previous year and a certain level of income and a certain timeframe.

Do they predict future returns as well? Advise on the portfolio make up?

tacpot12

Thrugelmir wrote: »

Do they predict future returns as well? Advise on the portfolio make up?

They don't advise on the portfolio make up, and they do assume that your assets perform exactly like the assets that their underlying data is based on. Such simulations are tools, and do not guarantee any outcome.