DC Pension: married with no kids.

BENNZ787

A lot of comments I see on DC pensions seem to have kids and inheritance in mind. I have work colleagues who wish to leave as much of the pot intact to pass on.
Without kids is there a different way of looking at it or is the 3-4% SWR still the way to go?
Thanks in advance. 

FIREDreamer

BENNZ787 said:

A lot of comments I see on DC pensions seem to have kids and inheritance in mind. I have work colleagues who wish to leave as much of the pot intact to pass on.
Without kids is there a different way of looking at it or is the 3-4% SWR still the way to go?
Thanks in advance. 

Consider an inflation linked annuity if the rate exceeds the SWR?

Moonwolf

It depends on your overall strategy and other sources of income.  I have DB pensions so I’m planning to have completely spent my DC pot between 80 and 90 and live on just my DB after that.  I might top up with an annuity, in fact I’m juggling my strategy around that at the moment.

With only DC, I’d consider a blended approach using a proportion to buy an annuity to cover the essentials and draw down the rest at a higher rate initially and not worry about running out, particularly after 75-80.  You must of course consider your spouse, what happens if you die first at 60, 70 or 80, will there be enough left for them. 

Also care needs, but I’m relying on selling our house to cover any extra I have to pay, again, don’t need to worry about leaving it.

dunstonh

Without kids is there a different way of looking at it or is the 3-4% SWR still the way to go?

With no concern about legacy, then an annuity would possibly be the better way to go based on current annuity rates.  (in respect of the chunk that is being used for income rather than capital expenditure)

Annuity rates are currently higher than the SWR

MEM62

BENNZ787 said:

A lot of comments I see on DC pensions seem to have kids and inheritance in mind. I have work colleagues who wish to leave as much of the pot intact to pass on.
Without kids is there a different way of looking at it or is the 3-4% SWR still the way to go?
Thanks in advance. 

What "the 3-4% SWR" are you referring to?  There is no universal, catch-all SWR.  It is dictated according to your personal circumstances.  

BENNZ787

Thanks all for the comments. 
The 3-4% I’m referring to is a number I frequently see in articles and perusing the internet. Not scientific, I appreciate, but a number that does seem to be frequently referenced.  

BENNZ787

Moonwolf said: 
I have DB pensions so I’m planning to have completely spent my DC pot between 80 and 90 and live on just my DB after that.  I might top up with an annuity, in fact I’m juggling my strategy around that at the moment.

is your DB quite significant or a fairly constrained number, but enough for when one is quite old and not spending much? Unless, of course, in poor health and having to pay increased helper/medical costs. 

Marcon

BENNZ787 said:

Thanks all for the comments. 
The 3-4% I’m referring to is a number I frequently see in articles and perusing the internet. Not scientific, I appreciate, but a number that does seem to be frequently referenced.  

It does, but repetition doesn't mean it is anything of the sort!

BENNZ787 said:

A lot of comments I see on DC pensions seem to have kids and inheritance in mind. I have work colleagues who wish to leave as much of the pot intact to pass on.
Without kids is there a different way of looking at it or is the 3-4% SWR still the way to go?
Thanks in advance. 

The IHT changes proposed for 2027 might mean that the 'kids' part anyway is no longer the bright idea it was once. What retirement provision does your spouse have?

thriftytracey

"Spending it between 80 and 90"

On what?  Many people that age are frail or have dementia, I guess you can spend it on walk in baths, stair lifts and home carers.

Some friends of ours have just purchased a camper van and a new apartment in Portugal, they are in their late 70's.  He now has a chronic, very painful condition and cancer.  She has had a heart attack.  They are now waiting for operations and investigations.

Albermarle

thriftytracey said:

"Spending it between 80 and 90"

On what?  Many people that age are frail or have dementia, I guess you can spend it on walk in baths, stair lifts and home carers.

Some friends of ours have just purchased a camper van and a new apartment in Portugal, they are in their late 70's.  He now has a chronic, very painful condition and cancer.  She has had a heart attack.  They are now waiting for operations and investigations.

Maybe they can spend it on private medical care?

ali_bear

"Don't wait. Don't wait!"