Pension Drawdown - Annual or Monthly ?

SVaz

I imagine it depends on the size of your actual pot.  £16k from half a mill isn’t much,  £16k from £100k is a big chunk, especially if that £100k drops by 20% the day before you sell some funds. 
Dividends from income funds seems the obvious choice, especially from a larger pot, no selling of funds required. 

segovia

Albermarle said:

segovia said:

LHW99 said:

If you are taking it as UFPLS, some platforms won't set up monthly UFPLS's - you have to request each one separately. Taking out annually (or 6 monthly) and keeping in a cash saving / ISA account to transfer from monthly can be less hassle.

I'll ask the provider, it's A J Bell 

I think it varies from provider to provider. I think with AJ Bell you have to have the cash available. If they have to sell investments they charge you. You need to check that though.

You do need to have the cash available, my query with them is can I sell assets just before they run the Payroll 

segovia

eskbanker said:

GenX0212 said:

 have always invested in income producing investments so there is a constant income flow sufficient to meet any future draw down needs ( in my case via planned UFPLSs) without necessitating investment sales at times when underlying capital values may have crashed.

My question to those who don't have income producing sipp assets, do you still sell assets at times of significant market  falls to meet your income drawdown, or make sure you always have sufficient cash in the kitty to meet 1 year's drawings? 

Doesn't that cut both ways, by holding 'cash' you could be losing out on investment growth?

The issue is that liquidating a fixed amount when values are depressed represents a higher percentage of the balance, thereby inhibiting future growth prospects - search for 'sequence of returns risk'.

I nearly pulled the trigger in April and then TRUMP stepped in with his stupid tariffs, my portfolio lost 22%. Its back to where it was in April and marginally ahead, so as long as there are no more setbacks I'm looking at between now and next April.   

segovia

GenX0212 said:

 have always invested in income producing investments so there is a constant income flow sufficient to meet any future draw down needs ( in my case via planned UFPLSs) without necessitating investment sales at times when underlying capital values may have crashed.

My question to those who don't have income producing sipp assets, do you still sell assets at times of significant market  falls to meet your income drawdown, or make sure you always have sufficient cash in the kitty to meet 1 year's drawings? 

Doesn't that cut both ways, by holding 'cash' you could be losing out on investment growth?

Holding cash IMHO is a waste, what you get on interest does not cancel out inflation. Cash in an ISA invested in ETF's is an option but obviously with risks, better to leave it where it is in my SIPP until it's needed.    

tacpot12

segovia said:

LHW99 said:

If you are taking it as UFPLS, some platforms won't set up monthly UFPLS's - you have to request each one separately. Taking out annually (or 6 monthly) and keeping in a cash saving / ISA account to transfer from monthly can be less hassle.

I'll ask the provider, it's A J Bell 

AJ Bell can definitely provide monthly UFPLS withdrawals. It's what I use. 

Your Safe Withdrawal Rate might well be more than 4% if you have a full state pension entitlement and other income streams, e.g. DB pensions, annuities, or rental properties. I am of the opinion that the SWR for my SIPP is around 6%. If anyone thinks this is unsafe, consider that all my living expenses currently can be met from my current income (from ISA and rental property) plus the future income I will receive from the state pension and DB pensions. So for the next six year, my SIPP just has to provide the future income that will come from the state pension and DB pensions (about £16K in today's money), and I am getting more than this in dividends. So I don't even need the assets to appreciate, but they have done so.

After I reach my state retireement age, I've calculated that I can withdraw £14K a year more from the SIPP than I need to live on, and the SIPP will STILL last until I'm 100.

poseidon1

segovia said:

eskbanker said:

GenX0212 said:

 have always invested in income producing investments so there is a constant income flow sufficient to meet any future draw down needs ( in my case via planned UFPLSs) without necessitating investment sales at times when underlying capital values may have crashed.

My question to those who don't have income producing sipp assets, do you still sell assets at times of significant market  falls to meet your income drawdown, or make sure you always have sufficient cash in the kitty to meet 1 year's drawings? 

Doesn't that cut both ways, by holding 'cash' you could be losing out on investment growth?

The issue is that liquidating a fixed amount when values are depressed represents a higher percentage of the balance, thereby inhibiting future growth prospects - search for 'sequence of returns risk'.

I nearly pulled the trigger in April and then TRUMP stepped in with his stupid tariffs, my portfolio lost 22%. Its back to where it was in April and marginally ahead, so as long as there are no more setbacks I'm looking at between now and next April.   

You kind have made my point. There will always be events which seriously unsettle markets for varying periods of time.

If you were already drawing down your monthly stipend at the time of Trump tariffs, you would need to have the presence of mind to suspend investment sales ( and temporarily forgoe drawdown income), until the later recovery - however long that takes.  Certainly possible in your case since you indicate having other  independent income sources, but for those whose Sipp is their primary income source, maybe a bit of a conundrum worth thinking about.

Having a  conveyor belt of investment income kicking out monthly/quarterly, avoids having to suspended drawdown in times of market stress.

Smudgeismydog

SouthCoastBoy said:

when I come to drawdown, if I do, currently moving towards an annuity, I'm planning on taking the full amount the preceding March, for the following tax year. For the first year of retirement I will live of cash savings.

For example if I retire Jan 2026, live off savings until Mar 27, withdraw 12 mths spending Mar 27 live off that until Mar 28 etc.

Retiring Jan 26?

Are you finally going to do it?

SouthCoastBoy

Smudgeismydog said:

SouthCoastBoy said:

when I come to drawdown, if I do, currently moving towards an annuity, I'm planning on taking the full amount the preceding March, for the following tax year. For the first year of retirement I will live of cash savings.

For example if I retire Jan 2026, live off savings until Mar 27, withdraw 12 mths spending Mar 27 live off that until Mar 28 etc.

Retiring Jan 26?

Are you finally going to do it?

Most probably not. That was just an example

Smudgeismydog

SouthCoastBoy said:

Smudgeismydog said:

SouthCoastBoy said:

when I come to drawdown, if I do, currently moving towards an annuity, I'm planning on taking the full amount the preceding March, for the following tax year. For the first year of retirement I will live of cash savings.

For example if I retire Jan 2026, live off savings until Mar 27, withdraw 12 mths spending Mar 27 live off that until Mar 28 etc.

Retiring Jan 26?

Are you finally going to do it?

Most probably not. That was just an example

Of course, you just need ‘one more year’

FIREDreamer

Smudgeismydog said:

SouthCoastBoy said:

Smudgeismydog said:

SouthCoastBoy said:

when I come to drawdown, if I do, currently moving towards an annuity, I'm planning on taking the full amount the preceding March, for the following tax year. For the first year of retirement I will live of cash savings.

For example if I retire Jan 2026, live off savings until Mar 27, withdraw 12 mths spending Mar 27 live off that until Mar 28 etc.

Retiring Jan 26?

Are you finally going to do it?

Most probably not. That was just an example

Of course, you just need ‘one more year’

For him, it sounds like “one more decade” 🤣🤣🤣