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Pension pot drawdown
Comments
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It's also the case that retirees should be saving for major home improvements, not drawing down on a pension unless they are confident they have more money in their pension that they need AND they understand and accept the tax implications of accessing their pension.
The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0 -
That's the obvious and sensible approach. Have options to sell from equities if they have done well, or cash if they are struggling. Then rebalance accordingly. It helps if it is not critical income.
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Budgeting is very important when you are retired, as is managing cash flow and tax planning. I would advise a retiree to pay off debts and make any large capital expenditures like new cars or home improvements while they are still working. Also maintain a tax efficient cash/investment buffer outside your pension so you can access funds without changing your tax band. An ISA is great for this flexibility and even a GIA or simple saving account is better than making an unplanned withdrawal from a DC pension account.
And so we beat on, boats against the current, borne back ceaselessly into the past.2
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