Drawdown: safe withdrawal rates

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Comments

  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Shouldn't point 5 come with a health risk warning (Continue with pension contributions until you reach age 75.) because it may fall foul
    of recycling rules?
  • Malthusian
    Malthusian Posts: 10,936 Forumite
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    It's really quite difficult to break the tax free cash recycling rules.

    Not realising that you can now only contribute £3,600pa if you've stopped work is more likely to catch people out if they take point 5 at face value and don't do any research into it.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    edited 10 June 2016 at 3:59PM
    AnotherJoe wrote: »
    Shouldn't point 5 come with a health risk warning (Continue with pension contributions until you reach age 75.) because it may fall foul of recycling rules?
    That's supposed to be a quick start, not a full lesson, the other posts later on can expand on things. LTA is more of an issue. Remembering here that HMRC has never invoked the recycling rule and its purpose was to prevent organised schemes. Still, I've just used one of the future use posts to add a bit about recycling. Not its main focus but it causes so much confusion and worry that it's worth addressing.

    I've still got a lot of writing and linking to do but hopefully the work in progress forms will be useful and help to improve the overall quality of planning.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    N1AK wrote: »
    I think part of the disconnect might be the comparison of yourself as an individual to a massive diverse population of data. The most obvious difference to me is that people who are saving effectively for retirement are likely to be controlling spending more than people who aren't; they are also likely to have the resources to increase spending in retirement when those who didn't save as much need to cut it back.

    Fair points and true but I still contend that the opportunities to spend are far greater after retirement than before, cutting back on a few lattes at work and even the commute costs is going to pale compared to taking cruises, staying away in hotels, eating out every day when away from home on holiday and so on. That's limited before retirement not mainly through affordability but time.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    AnotherJoe wrote: »
    Fair points and true but I still contend that the opportunities to spend are far greater after retirement than before, cutting back on a few lattes at work and even the commute costs is going to pale compared to taking cruises, staying away in hotels, eating out every day when away from home on holiday and so on. That's limited before retirement not mainly through affordability but time.

    Yes, but not everyone wants to travel extensively.

    People may do that but many won't. Also many people don't necessarily want cruises and five star hotels even if they can afford it, it's down to preference as well as time and budget.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    N1AK wrote: »
    The most obvious difference to me is that people who are saving effectively for retirement are likely to be controlling spending more than people who aren't;.

    Saving is a lost habit. There's going to be a generation far far poorer.
  • westv
    westv Posts: 6,084 Forumite
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    Bump

    as I think this thread has very useful info.
  • ffacoffipawb
    ffacoffipawb Posts: 3,593 Forumite
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    westv wrote: »
    Bump

    as I think this thread has very useful info.

    Agreed, should be made a 'sticky'.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    Two additions:

    Academic Acceptance for Reverse Mortgages in Retirement Income and notice that in a low interest rate environment it can potentially double the safe withdrawal rate!
    Does Asset Allocation Affect Withdrawal Rates? : yes, more equities increase the upside without affecting the downside much.
  • edinburgher
    edinburgher Posts: 13,462 Forumite
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    edited 20 July 2016 at 8:45AM
    Thrugelmir wrote: »
    Saving is a lost habit. There's going to be a generation far far poorer.

    I don't think that it's fair to conflate those two (as the main cause for a poorer generation). Surely the death of DB pensions will be a far greater factor in terms of future generations being less well off? A few decades ago, every FTSE100 company had a DB pension scheme, now there are 2-3.
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