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Pension Myths and Misunderstandings
Comments
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How about….
- My spouse will inherit my state pension.
- It's a waste of money to be in my work pension because I get more take home pay if I don't contribute to it!
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⭐️🏅😇🏅🏅🏅🏅🏅🏅4 -
I had hoped for a useful list, and perhaps in a bit I might summarise them, but you can see from my initial post, I did expect it to be derailed.
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How about the myth that pensions will be less complicated in future, meaning more folk will be able to understand, plan and account meaningfully for their retirement.
2 -
or need a high % withdrawal, hit a patch of bad returns at the start, and run out of money prematurely leaving only SP to live off.
Annuity is not a gamble. its a tool. it has a job. if you value the job it does, its a tool you can use. if not, then don’t.
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That's not a myth, it's a dirty great big FIB.
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perhaps not a misunderstanding but a curious wrinkle.. if you take taxable money from pension you trigger MPAA limiting your contributions to 10k. I think most know of that. But I didnt’ know that the MPAA is forward looking. so you could have contributed 50k during the year, then take a taxable payment from a pension, and still have 10k further contributions possible
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You can only use carry forwards if you earn £60k+
The new state pension is better than the old
It's a great idea to commute a DB pension at a 12:1 rate
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The real problem with this type of thread (not the first such to be started) is the number of people who read it and later remember what they read - but unfortunately don't also remember that what they read was a myth, or just plain wrong.
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!3 -
Every pension will allow you to access it in all the ways the pension freedoms allow!
Unfortunately, that will depend on whether it is DB or DC, how old the pension is (when the plan was started) and possibly which company it is with.
You may have to move it, if the way you want to take it isn't supported by your provider / plan, and in some circumstances that can incur significant costs.
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Maybe every post should start "It's a myth that……"
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