I know on one level this is a ridiculous question but I’m going to ask it anyway
what amount of pension savings do you think k you could live off if you were to retire at 57
Im asking because I read somewhere that people are over cautious in this regard when it comes to draw down .
Maybe a better question or asking it a different way is . If you had 840k how much might you consider drawing down a year
If you only had that money on instant access you could earn @£38,000 pa interest. Put us much away tax free in ISAs, PSBs & in the name of the lower tax payer.
If you invest you could earn a lot more. If no mortgage or rent drawing £3,000 pm is more than comfortable.
I retired at 49 and my capital has gone up in 13 years.
Although £3000 a month is a lot of money and would be enough for me without a mortgage, surely everything depends on your social life?
The £38,000 depends on interest rates being where they are now in the future, which is very unlikely. Perfectly possible they'll drop to say 2.5%, slashing your income, so investing an element elsewhere makes a lot of sense.
I know on one level this is a ridiculous question but I’m going to ask it anyway
what amount of pension savings do you think k you could live off if you were to retire at 57
Im asking because I read somewhere that people are over cautious in this regard when it comes to draw down .
Maybe a better question or asking it a different way is . If you had 840k how much might you consider drawing down a year
If you only had that money on instant access you could earn @£38,000 pa interest. Put us much away tax free in ISAs, PSBs & in the name of the lower tax payer.
If you invest you could earn a lot more. If no mortgage or rent drawing £3,000 pm is more than comfortable.
I retired at 49 and my capital has gone up in 13 years.
Although £3000 a month is a lot of money and would be enough for me without a mortgage, surely everything depends on your social life?
It depends on how good you are with money and savings and investments and how much you spend. Do you invest well, do you look for the best savings rate, do you know how to invest and save tax efficiently?
Someone could have £500K and it would be “gone” in a couple of years.
The £38,000 depends on interest rates being where they are now in the future, which is very unlikely. Perfectly possible they'll drop to say 2.5%, slashing your income, so investing an element elsewhere makes a lot of sense.
A lot depends on your risk profile - if younger then longer-term investments with an element of risk make more sense, but when you're as old as me then I'm not taking any risks! Yes interest rates will likely be as high now as they will be over the coming decade or so and will reduce, but that can be mitigated with longer-term fixes - 4.5% for a five year fix is available right now. Also roll your fixed rate bonds with one maturing most years e.g. some one year, some 2, some 3 and some 5. Max on ISAs if you are able is a no brainer of course.
But I would agree that just relying on interest for income is a risky business - you will need to draw down on capital as well. I expect my capital to reduce gradually and am not looking to just live on investment income, we intend to to spend it all!
I believe if you have more than 23grand of cash/assets you have to pay for it until you run out(or get down to 23 grand?), then government pays for it or if you don’t have any money at all the government pays for it
I believe if you have more than 23grand of cash/assets you have to pay for it until you run out(or get down to 23 grand?), then government pays for it or if you don’t have any money at all the government pays for it
So basically another form of tax
Yes, if you live your life on the streets, never earn, never pay any taxes (extreme scenario) you’d get free care in a care home. If you work bloody hard, save well, have a good pension, a paid for house, pay tax on everything then at 60 you get dementia and go into a care home then eventually you’d lose the lot.
I believe if you have more than 23grand of cash/assets you have to pay for it until you run out(or get down to 23 grand?), then government pays for it or if you don’t have any money at all the government pays for it
So basically another form of tax
Yes, if you live your life on the streets, never earn, never pay any taxes (extreme scenario) you’d get free care in a care home. If you work bloody hard, save well, have a good pension, a paid for house, pay tax on everything then at 60 you get dementia and go into a care home then eventually you’d lose the lot.
And then it would be paid for , so more you earn more you’re affectively taxed , just the way of the world we live in more you earn more you pay
I know on one level this is a ridiculous question but I’m going to ask it anyway
what amount of pension savings do you think k you could live off if you were to retire at 57
Im asking because I read somewhere that people are over cautious in this regard when it comes to draw down .
Maybe a better question or asking it a different way is . If you had 840k how much might you consider drawing down a year
If you only had that money on instant access you could earn @£38,000 pa interest. Put us much away tax free in ISAs, PSBs & in the name of the lower tax payer.
If you invest you could earn a lot more. If no mortgage or rent drawing £3,000 pm is more than comfortable.
I retired at 49 and my capital has gone up in 13 years.
Although £3000 a month is a lot of money and would be enough for me without a mortgage, surely everything depends on your social life?
It depends on how good you are with money and savings and investments and how much you spend. Do you invest well, do you look for the best savings rate, do you know how to invest and save tax efficiently?
Someone could have £500K and it would be “gone” in a couple of years.
Another person may by then have closer to £600K.
Currently we are living off tax free cash drawn down a couple of years ago (but saved in fixed term investments until required), monies from our SIPP’s of £12,570 per year each (so tax free) and we take income from that equating to £3,500 per month which we live on plus it pays for holidays etc. Think as we get older the £3,500 per month will reduce. I’ve worked out the current value of our SIPP’s will last until I’m about 77 (not allowing for increases or decreases in value). I’ve purposely not included our state pensions in my calculations so they are effectively a bonus meaning once they kick in we will take less from our SIPP’s which will give them added longevity. At some point too we will downsize so releasing capital.
The above is all well and good but I still struggle now when deciding should we spend x amount on this or that because it’s always in your mind ‘what if I don’t have enough in later life’? Then what do I do?
Lot worse ‘problems’ to have, I fully realise that and know that I’m ‘lucky’ to have worked bloody hard to be in this position but it’s still a worry to me.
I know on one level this is a ridiculous question but I’m going to ask it anyway
what amount of pension savings do you think k you could live off if you were to retire at 57
Im asking because I read somewhere that people are over cautious in this regard when it comes to draw down .
Maybe a better question or asking it a different way is . If you had 840k how much might you consider drawing down a year
If you only had that money on instant access you could earn @£38,000 pa interest. Put us much away tax free in ISAs, PSBs & in the name of the lower tax payer.
If you invest you could earn a lot more. If no mortgage or rent drawing £3,000 pm is more than comfortable.
I retired at 49 and my capital has gone up in 13 years.
Although £3000 a month is a lot of money and would be enough for me without a mortgage, surely everything depends on your social life?
It depends on how good you are with money and savings and investments and how much you spend. Do you invest well, do you look for the best savings rate, do you know how to invest and save tax efficiently?
Someone could have £500K and it would be “gone” in a couple of years.
Another person may by then have closer to £600K.
Currently we are living off tax free cash drawn down a couple of years ago (but saved in fixed term investments until required), monies from our SIPP’s of £12,570 per year each (so tax free) and we take income from that equating to £3,500 per month which we live on plus it pays for holidays etc. Think as we get older the £3,500 per month will reduce. I’ve worked out the current value of our SIPP’s will last until I’m about 77 (not allowing for increases or decreases in value). I’ve purposely not included our state pensions in my calculations so they are effectively a bonus meaning once they kick in we will take less from our SIPP’s which will give them added longevity. At some point too we will downsize so releasing capital.
The above is all well and good but I still struggle now when deciding should we spend x amount on this or that because it’s always in your mind ‘what if I don’t have enough in later life’? Then what do I do?
Lot worse ‘problems’ to have, I fully realise that and know that I’m ‘lucky’ to have worked bloody hard to be in this position but it’s still a worry to me.
Comments
Do you invest well, do you look for the best savings rate, do you know how to invest and save tax efficiently?
Someone could have £500K and it would be “gone” in a couple of years.
Another person may by then have closer to £600K.
Think as we get older the £3,500 per month will reduce. I’ve worked out the current value of our SIPP’s will last until I’m about 77 (not allowing for increases or decreases in value). I’ve purposely not included our state pensions in my calculations so they are effectively a bonus meaning once they kick in we will take less from our SIPP’s which will give them added longevity. At some point too we will downsize so releasing capital.
The above is all well and good but I still struggle now when deciding should we spend x amount on this or that because it’s always in your mind ‘what if I don’t have enough in later life’? Then what do I do?
Lot worse ‘problems’ to have, I fully realise that and know that I’m ‘lucky’ to have worked bloody hard to be in this position but it’s still a worry to me.