Retirement calculations

michaels

flopsy1973 said:

Not thought about that I was hoping there would be enough in the pot for the remaining one. It's 1.2  now so hopefully more in 10 yes. 

You have way more than enough, my point was more generic, if you had set up a combined 30k based on 2 state pensions and private provision for the other 7k then loss of the state pension on first death would be a big proportion of income lost for the remaining partner.

Ciprico

Are you still contributing to the pension... Probably not much point if you are, as you may struggle to get it out without hitting 40% tax rate....

flopsy1973

I have moved company now so another pension with lower contribution rates. Sorry can you explain why you think I would be hitting the 40% tax rate?

Regarding the earlier comments are the figures quoted with the state pension included ?

flopsy1973

flopsy1973 said:

I have moved company now so another pension with lower contribution rates. Sorry can you explain why you think I would be hitting the 40% tax rate?

Regarding the earlier comments are the figures quoted with the state pension included ?

Hi all
Any comments regarding the above questions thanks

Sarahspangles

flopsy1973 said:

I have moved company now so another pension with lower contribution rates. Sorry can you explain why you think I would be hitting the 40% tax rate?

Regarding the earlier comments are the figures quoted with the state pension included ?

I think the forum member was saying there is a point where continuing to contribute to a pension is no longer as tax efficient. This is because you can only withdraw so much each year before you pay higher rate tax. So if you had most of your savings in your pension, but needed to take out a larger than usual amount in a particular tax year, you might pay a bit more tax.

Bostonerimus1

tacpot12 said:

The "4% rule" that is the basis for suggestions that 3.5% is a safe withdrawal rate for the UK came from the USA where investment returns have typically been higher. However, the USA has a very different state pension structure to the UK, and IMHO anyone who has a full state pension has a safe withdrawal rate that is better than 4%. 

Having modelled my pension with the same techniques that were used to discover the "4%" rule, my SWR for my DC pension is well over 5.5% because I have a full state pension and other pension provisions (2 small DB pensions, and a rental property). I retired 5 years ago, and my pension is worth more than when I retired and I have had five years of income from it.

FYI the US does have a very different SP system from the UK's as it still retains an earnings related component and it is also possible to take it at any age after 62 at a reduced amount - for those born after 1960 full pension is paid if you wait to age 67. The benefit is also considerably higher in the US for most people. At age 67 the average payment is ~£17k with the minimum being £10k (for a very small number of people) and the max being £35k. For most retirees in the US their "state pension" is their largest source of income and after 50 years the DC pension regime has proven to be an unreliable source of income. The 4% rule is a fantasy for most as they simply haven't a large enough pot for it to be relevant.

Personally I like the UK's flat rate SP approach, but the level of that flat rate is ridiculously low for the amounts UK employers and employees contribute. The low level of SP and the over reliance on the DC pension component will make life increasingly difficult for many UK pensioners.

MX5huggy

You don’t mention your partners pensions, if they don’t have much then it’s more tax efficient in payment to make sure they have their own provision to use up their own tax allowance.

flopsy1973

No my partner only has around 40k in pension she is hoping to get a pension pot of 100k by the time she retires.
Did all the previous figures quoted include the state pension when that becomes payable ?

JoeCrystal

Why you are asking the same questions? I gathered that all figures does mention whatever the state pension or not are taken into account.

You clearly got enough assets in place to not to be concerned about running out of £30k a year and that concern is virtually eliminated when you take your potential state pensions into account.

Rather than relying on a calculator, do your own workings on the spreadsheet that can take into all other factors and other incomes to get a better understanding.

flopsy1973

I ask the questions because I don't know the answers and others on here know more or will have done it before. This is a forum to help people after all ! . All I was asking had the previous amounts taken into account the state pension. I don't know enough about the tax implications that I also need to start planning for also