What size pot for £25k pa

MEM62

NannaH said:

Can people please stop saying ‘quick and dirty’ when referring to things. It’s absolutely vile. 

As is any reference to food being ‘dirty’ 🤢

Our local American Diner used to do 'dirty fries' - they were amazing!   

Albermarle

Some mixing and matching is also possible. As an example.
50% of pot as a fixed term annuity until SP age, then a lower income lifetime annuity from then on.
At same time 50% stays as DC pot.
However amount of money needed would still be in the same sort of ball park mentioned.

Mick70

Thanks for all replies folks 👍

michaels

QrizB said:

Mick70 said:

If was age 55 this year and wanted to retire and to have £25k pa pension and increase that yearly with inflation (say it settles back to 2-3%), and would reduce slightly once get SP at 67, what size DC pot would you need now ?

In part it depends on what you mean by "slightly". Here are two example scenarios.

Hargreaves Lansdown's current best buy tables show that £100k will buy a 55-year-old £3257 of RPI-indexed annuity.

To generate £25k indefinitely would cost £770k.

To generate £15k indefinitely would cost £460k. You could top this up with £120k of index-linked gilts maturing to give £10k pa (as state pension replacement) for the next 12 years, to 67. That's a total of £580k.

Drawdown would probably cost less than this but then you're the one taking the risks, not the annuity provider.

Edited for typos.

This would be my calc too.