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How long pension pot might last - sense check of calculations
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westv said:I can understand the benefit of deferring purchasing an annuity to later life but obviously we won't know if rates by that then will be similar or not to now or whether our pension pots will be better or worse than now.
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Linton said:westv said:I can understand the benefit of deferring purchasing an annuity to later life but obviously we won't know if rates by that then will be similar or not to now or whether our pension pots will be better or worse than now.0
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pensionpawn said:cfw1994 said:DT2001 said:getting_better_2 said:Hi All,
Following some really helpful advice over the last couple of weeks, I've started pulling together a spreadsheet plan of how far my pension pot will take me...
Based on some fairly simple numbers of:
4% growth
3% inflation
3.5% drawdown
My calculations show pot running out after approx 33-34 years does that sound about right? ( current calc based on starting to draw at 58 so would be good until 91/92 which feels suitably ambitious)
Also does growth of 1% above inflation sound realistic, especially as by the time of drawing down I'll presumably have a very low risk investment
Thanks in advance for any thoughts
Is it your intention to reduce your drawdown at SPA? If so you can probably draw more early.
Do you have 2-4years ‘cash’ funds you can access to avoid drawing down if markets are not behaving kindly?
Many can start with more than 3.5% if they can reduce the draw dramatically when SP kicks in.
Inflation is a tricky one. Could be 10% by the end of the year, but the question is more about your ‘personal’ inflation rate. Somethings we cannot impact: council tax, energy prices. Some we can: defer capital purchases, shop around for insurance, the holidays we chose to have, even the shops we visit for food & the food we buy…
Given how none of us have a crystal ball, plan as best you can & be flexible. Good luck!0 -
pensionpawn said:pensionpawn said:cfw1994 said:DT2001 said:getting_better_2 said:Hi All,
Following some really helpful advice over the last couple of weeks, I've started pulling together a spreadsheet plan of how far my pension pot will take me...
Based on some fairly simple numbers of:
4% growth
3% inflation
3.5% drawdown
My calculations show pot running out after approx 33-34 years does that sound about right? ( current calc based on starting to draw at 58 so would be good until 91/92 which feels suitably ambitious)
Also does growth of 1% above inflation sound realistic, especially as by the time of drawing down I'll presumably have a very low risk investment
Thanks in advance for any thoughts
Is it your intention to reduce your drawdown at SPA? If so you can probably draw more early.
Do you have 2-4years ‘cash’ funds you can access to avoid drawing down if markets are not behaving kindly?
Many can start with more than 3.5% if they can reduce the draw dramatically when SP kicks in.
Inflation is a tricky one. Could be 10% by the end of the year, but the question is more about your ‘personal’ inflation rate. Somethings we cannot impact: council tax, energy prices. Some we can: defer capital purchases, shop around for insurance, the holidays we chose to have, even the shops we visit for food & the food we buy…
Given how none of us have a crystal ball, plan as best you can & be flexible. Good luck!0
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