Max withdrawal amount to stay out of higher rate tax

Lordturpin

Secret2ndAccount said:

Buy some government bonds. You can get just as good a rate of return (3,4,5%) and pay little or no tax because the gains are tax free. For a 20% taxpayer, maybe not worth the hassle (though I do it). For a 40% taxpayer, trying to maximise tax-free withdrawals, it's a no-brainer.

Gilt Ladder of sorts  - good point - Tks

Cobbler_tone

Totally depends what your needs and motivation is. If you want to spend it all then higher tax is unavoidable. I'd guess that most people would be factoring in buying a chunky annuity. 

QrizB

Note that with a £2M pot, taking "only" £67k a year might still mean dying with somewhat more than £2M in the pot!

Rattusnorvegicus

lol 2 mill at 6% avg growth would take you 48 years to deplete even if you took £130k/year

Kind of amusing numbers really, but we all thank you for the £2mill of tax due while extracting it

Secret2ndAccount

Rattusnorvegicus said:

lol 2 mill at 6% avg growth would take you 48 years to deplete even if you took £130k/year

...

Yeah, but in 48 years what will 130k buy you? I remember my Mum buying cod and chips for the three of us for 5p. That was 50ish years ago.  So in 48 years, maybe that 130k will buy you a nice outfit, or an annual service on your self driving car.
Maybe better to model in real terms. 60k initial withdrawal, increasing with inflation annually, should last at least 30 years. With an after-tax value of <50k, that 2mil number starts to look comfotable, but far from amusing. Not amusing at all once the LSA runs out

ali_bear

Are you still earning? 

You've probably paid too much into your pension from a tax perspective - were you badly advised in the past? Anyway now's the time to get good professional advice. 

DRS1

ali_bear said:

Are you still earning? 

You've probably paid too much into your pension from a tax perspective - were you badly advised in the past? Anyway now's the time to get good professional advice. 

Given the period over which the OP must have been contributing they were probably advised by Mystic Meg.  Who else would have known that the LTA would get abolished?

Dazed_and_C0nfused

DRS1 said:

ali_bear said:

Are you still earning? 

You've probably paid too much into your pension from a tax perspective - were you badly advised in the past? Anyway now's the time to get good professional advice. 

Given the period over which the OP must have been contributing they were probably advised by Mystic Meg.  Who else would have known that the LTA would get abolished?

Her brother, Mystic Jeremy 😉

Grumpy_chap

Lordturpin said:

i want to get it out as cost efficiently and fast as possible.

Draw out the whole lot in one go and make a massive and generous donation to charity under gift aid which will increase your basic rate band.  The IHT dilemma will also be addressed in the same action.

That would appear to be the solution to taking the funds as cost (tax) efficiently and as fast as possible which is the stated aim as expressed.

BikingBud

By a hospital wing or a lifeboat?