It's time to start digging up those Squirrelled Nuts!!!!

cfw1994

Sea_Shell said:

"Are you thinking that you would have MORE by taking the TFLS out? Have I got something wrong above?!”
It's not about having MORE, it's about (for us) getting it ALL out TAX FREE, as quickly as possible!
If the pot were much bigger, we wouldn't be able to do that within 10 years.

A laudable aim....but I don’t think it makes any difference taking it up front: that was what I was trying to illustrate!

Dh6

fred246 said:

A sweeping statement with a lot of truth in it. Always remember Fred's top tip. If you need a boiler repair ask for a 'free quote for a new boiler'. Plumbers will come running. Ask for a repair and they are all too busy.

As a gas engineer myself I’m always booked in advance for at least 3-4 weeks. Good repair guys are few and far between but installers are ten a penny. If a customer was buying their own parts off eBay for me to fit I’d run a mile!!

Sea_Shell

cfw1994 said:

Sea_Shell said:

"Are you thinking that you would have MORE by taking the TFLS out? Have I got something wrong above?!”
It's not about having MORE, it's about (for us) getting it ALL out TAX FREE, as quickly as possible!
If the pot were much bigger, we wouldn't be able to do that within 10 years.

A laudable aim....but I don’t think it makes any difference taking it up front: that was what I was trying to illustrate!

I think I get it...I've had coffee!!!

So if you had a pot of £166,660 and kept it all in the pension, you could drawdown £16,666 pa over 10 years and get it all out.
If you'd already taken 25%, your pot would be £125,000, so you could then only drawdown £12,500 pa, still taking 10 years.

If the pot doubled (ooh wouldn't that be nice!!), then the time taken for both pots to be emptied would be the same, i.e. would double too, to 20 years regardless.    ANY growth would extend the withdrawal period (or shorten it in a falling market!)

So it really just comes down to, do you want "control" of that 25% to be able to dip into at any time during that drawdown period, rather than wait for it to be dripped out to you.   

Like I said upthread, we don't need to make any final decisions on this until April 2022, and the world could be a very different place by then!!

I'm off to go and lie down in a darkened room for a bit, before my head explodes!!!!!

shinytop

shinytop said:

Sea_Shell said:

shinytop said:

Sea_Shell said:

shinytop said:

Sea_Shell said:

As I said up thread, I'll be doing a full round up of the end of year figures...at the end of the year!!!

But prompted by another thread, I've just looked at the swing in our portfolio between the middle of the slump in March 2020 and the recovery that seems to have taken place up until now.   

That swing is just shy of £80,000!   We were down £56,000 from Dec 19 to March 20, and then back up again, increasing by £24,000 in the process.

I know it's just all "on paper" and no gains are real until realised, but still, that's some recovery.    

What's that in percentage terms if you don't mind me asking? (I assume you're happy to share going by previous posts). Looks like we were down 14% from December to March and now about 10% up (December to now).  That's mostly dull multi-asset funds and cash.  Some swing indeed and I'm wondering whether it can last.   

If I've done the maths right, we were down 10% Dec 19 - Mar 20.   Then up 15.5% Mar 20 - Dec 20.

Dec 19 - Dec 20 we're up 4% (net of spends).  Gross up 6%

£562k to £506k to £585k.

These are are total pots including cash, so it's not just investments in isolation.

You must be quite pleased with that considering it was/is a global pandemic.. 
BTW in case you didn't know you can track your ups and downs by setting up your portfolio on Trustnet.

Pleased, yes.   Apprehensive that it'll vanish as quickly as it arrived, yes!!

Do you have to create a log in to use the Trustnet portfolio tool?   Is it free?

Can it include funds that don't subscribe to them?    

Log in yes, free yes.  I doubt it can use funds that don't subscribe. 

Actually I think you can ...

Sea_Shell

Can I just check one more thing...
    
Based on current personal allowance of £12,500, does that mean that if I transfer 10% of mine, taking DH to £13,750, he could drawdown £18,333 pa gross, tax free?  £1527 per month?

Notepad_Phil

Sea_Shell said:

Can I just check one more thing...
    
Based on current personal allowance of £12,500, does that mean that if I transfer 10% of mine, taking DH to £13,750, he could drawdown £18,333 pa gross, tax free?  £1527 per month?

Yes if you're talking about marriage allowance (which I presume you are) - though of course your own personal allowance would be reduced.

DairyQueen

shinytop said:

Can it include funds that don't subscribe to them?    

Log in yes, free yes.  I doubt it can use funds that don't subscribe. 

Actually I think you can ...

Yes, you can.

cfw1994

Sea_Shell said:

cfw1994 said:

Sea_Shell said:

"Are you thinking that you would have MORE by taking the TFLS out? Have I got something wrong above?!”
It's not about having MORE, it's about (for us) getting it ALL out TAX FREE, as quickly as possible!
If the pot were much bigger, we wouldn't be able to do that within 10 years.

A laudable aim....but I don’t think it makes any difference taking it up front: that was what I was trying to illustrate!

I think I get it...I've had coffee!!!

So if you had a pot of £166,660 and kept it all in the pension, you could drawdown £16,666 pa over 10 years and get it all out.
If you'd already taken 25%, your pot would be £125,000, so you could then only drawdown £12,500 pa, still taking 10 years.

If the pot doubled (ooh wouldn't that be nice!!), then the time taken for both pots to be emptied would be the same, i.e. would double too, to 20 years regardless.    ANY growth would extend the withdrawal period (or shorten it in a falling market!)

So it really just comes down to, do you want "control" of that 25% to be able to dip into at any time during that drawdown period, rather than wait for it to be dripped out to you.   

Like I said upthread, we don't need to make any final decisions on this until April 2022, and the world could be a very different place by then!!

I'm off to go and lie down in a darkened room for a bit, before my head explodes!!!!!

One reason to take chunks earlier could also be to invest in “riskier but high potential gain” funds.  If they rocket up, the growth there is all tax-free at point of withdrawal.
On the bold comment above..I feel that doubling within 10 years would tube the minimum I would hope for, overall.
Our default work fund did that over the past 10 (eg, 100k became 200k)....but a similar sounding fund, still a global one, took the same amount to 300k.  Same risk, same costs.  
Another couple of funds (International and US based) raise that growth bar higher and higher.  

Risky?  Perhaps a little......but I suggest having some safer (that might not double), and some riskier....

Sea_Shell

It could end up being the "Magic Porridge Pot" of pensions....you just keep taking out and never get to the bottom!!!

By the time DH gets his SP, he will become a tax-payer, regardless.  So it's just about managing the allowances until then.

At SP age would he essentially have 3 options (to keep it simple), I think...
1) Stop drawdown on the DC pension completely, and leave it there.  Use his PA against DB/SP.
2) Reduce the drawdown amount to reduce overall tax due
3) Carry on with drawdown at the rate it was, and pay full tax on all the other income on both DB and SP

In todays prices DB is to be in the region of £8,500 and SP £7,500.   DB pays out at 65 and SP at 67.

fred246

It's a bit of a balancing act for us. The original plan was to empty a SIPP tax free. Now we realise that could just lead to a big inheritance tax bill. If we die with 2 good SIPPs that might be the best for our children as they don't form part of our estate. We can only withdraw until 67 and need enough money to keep contributing to 75. A lot depends on investment returns.