Annuities versus Drawdown versus both

Dazed_and_C0nfused

Springfield1970 said:

Bostonerimus1 said:

My advice would be to pay off the mortgage from income before you retire...don't use the TFLS to pay it off. Then secure a base of income with a lifetime annuity, there are arguments for either index linked or fixed, and do drawdown from the DC pot. If you can DIY the drawdown, as financial fees are a big drag on your drawdown amount, especially in the early years.

Thank you for your reply. No DC pot here just SIPP.  It's been strongly recommended I don't use the TFLS to pay off the mortgage but I've run the figures and it's so tempting (I hate having to pay the interest and the critical illness insurance and income protection insurance).  I did do some calculations, but I think I need to do them again.  However, if my pot doesn't dwindle down and I don't take the TFLS then the TFLS portion could be worth a LOT MORE as it grows particularly as I plan to continue running my business until I drop.

Oh but to be free of the chalice of half of my take home pay servicing mortgage capital, capital overpayments, and pension investments. It takes a lot of discipline and sacrifice.

If your SIPP isn't a "DC pot" then what is it 🤔

Springfield1970

Dazed_and_C0nfused said:

Springfield1970 said:

Bostonerimus1 said:

My advice would be to pay off the mortgage from income before you retire...don't use the TFLS to pay it off. Then secure a base of income with a lifetime annuity, there are arguments for either index linked or fixed, and do drawdown from the DC pot. If you can DIY the drawdown, as financial fees are a big drag on your drawdown amount, especially in the early years.

Thank you for your reply. No DC pot here just SIPP.  It's been strongly recommended I don't use the TFLS to pay off the mortgage but I've run the figures and it's so tempting (I hate having to pay the interest and the critical illness insurance and income protection insurance).  I did do some calculations, but I think I need to do them again.  However, if my pot doesn't dwindle down and I don't take the TFLS then the TFLS portion could be worth a LOT MORE as it grows particularly as I plan to continue running my business until I drop.

Oh but to be free of the chalice of half of my take home pay servicing mortgage capital, capital overpayments, and pension investments. It takes a lot of discipline and sacrifice.

If your SIPP isn't a "DC pot" then what is it 🤔

Ah! I'm learning everyday, didn't realise they were the same thing. I thought DCs were for employees. Thanks

Linton

More support for a mixed solution..

To avoid stress when you reach the age wen you cannot cope with it you really need your basic acceptable  living expences covered by guaranteed income. Beyond that, spending all your pension pot on guaranteed income is very inflexible.  How do you manage major expenditure? Taking significant excess income and paying it into a separate pot solely to hold money for expensive holidays and other one-offs is just an inefficient way of not taking the income in the first place.

Albermarle

Springfield1970 said:

Dazed_and_C0nfused said:

Springfield1970 said:

Bostonerimus1 said:

My advice would be to pay off the mortgage from income before you retire...don't use the TFLS to pay it off. Then secure a base of income with a lifetime annuity, there are arguments for either index linked or fixed, and do drawdown from the DC pot. If you can DIY the drawdown, as financial fees are a big drag on your drawdown amount, especially in the early years.

Thank you for your reply. No DC pot here just SIPP.  It's been strongly recommended I don't use the TFLS to pay off the mortgage but I've run the figures and it's so tempting (I hate having to pay the interest and the critical illness insurance and income protection insurance).  I did do some calculations, but I think I need to do them again.  However, if my pot doesn't dwindle down and I don't take the TFLS then the TFLS portion could be worth a LOT MORE as it grows particularly as I plan to continue running my business until I drop.

Oh but to be free of the chalice of half of my take home pay servicing mortgage capital, capital overpayments, and pension investments. It takes a lot of discipline and sacrifice.

If your SIPP isn't a "DC pot" then what is it 🤔

Ah! I'm learning everyday, didn't realise they were the same thing. I thought DCs were for employees. Thanks

A DC pot can be in many variations. 
Workplace pension, auto enrolment pension, SIPP, Personal Pension, stakeholder pension etc 

However from a legal/tax perspective they all are the same.

The main point with a SIPP, is that you have a very wide range of potential investments, which can be a good or bad thing ( too much choice for many) and you have to choose them yourself or your money just sits in cash.
A workplace pension will have less choice, and if you make no choice then your money goes into a default fund.