AVC LGPS How long will 100K last?

Maria2512

Hi,

I’m hoping to cash in my AVC in a couple of years time and was number crunching. I have a question!!

If I wanted to invest100k and wanted an income of £2200 a per month until the money runs out. What is the best course of action to try and achieve this and maximise the best results? Bank? Annuity?

Any ideas?

cloud_dog

Is the £2200pm net or gross?

Will this be your only taxable income?  If not what other taxable income is there?

Have you tried getting an annuity quote (as there are a number of variable we do not know about your circumstances that could affect the value)?
https://www.hl.co.uk/retirement/annuities

The £100k is only going to last 3.x years (4 maybe?).

JoeCrystal

Have you considering using LGPS itself to get you index linked annuity with AVCs? I believe it is still more generous than the open market.

Maria2512

£2200 would be a net figure. I will be taking my LGPS pension albeit with deductions at the same time. There is also the possibility of redundancy on the horizon. 

Just trying to keep my head in the game and stay ahead!!

Maria2512

JoeCrystal said:

Have you considering using LGPS itself to get you index linked annuity with AVCs? I believe it is still more generous than the open market.

Thanks for the tip. I will ask

daveyjp

Regardless of how you invest/save the money (fixed income annuity for a limited period, higher interest savings accounts, other potentially riskier investment) with a withdrawal rate of £2200 a month (£26,400 a year) the £100k will only last about 4 years. 

This site has a few tools to play with as regards annuities.

https://www.moneyhelper.org.uk/en

Exodi

Buying an annuity for £100k won't be anywhere near an annual income of £26.4k: https://www.hl.co.uk/retirement/annuities/best-buy-rates

Over such a short time frame it would be pretty bold to invest in anything with a modicum of risk.

Putting it in some sort of savings account and you'll pretty much get 4 years out of it.

Albermarle

Investment/ savings strategy comes much more into play when you are looking at a long time frame and only taking a small % of the pot each year.
At this very quick withdrawal rate it probably does not matter too much, as long as you avoid anything too dodgy.

sg1000

If it is a LGPS AVC, buy extra pension in your pension scheme.  Likely to be much better deal that buying a seperate annuity, or investing.