#CALCULATE DRAWDOWN PENSION FULL#
The Which? Money Weekly newsletter is packed full of the latest news and advice to help you make the most of your finances, both in retirement and elsewhere. Optimistic - That's assuming that once you retire, your cash investment grows at an average of 1.00% a year, fixed interest at 5.50% a year and equities at 8.00% a year. Middling - That's assuming that once you retire, your cash investment grows at an average of 0.50% a year, fixed interest at 4.75% a year and equities at 7.25% a year. Pessimistic - That's assuming that once you retire, your cash investment grows at an average of 0.00% a year, fixed interest at 4.00% a year and equities at 6.50% a year. The investment growth assumption is set at 'middling' but you can alter the level of growth as per these assumptions: Adventurous - 5% cash/25% fixed interest/70% stocks and shares.Moderate - 10% cash/40% fixed interest/50% stocks and shares.Cautious - 30% cash/50% fixed interest/20% stocks and shares.The example does not take into consideration your personal tax code. If you live in Scotland or Wales you may pay a different rate of income tax. Tax rates and allowances may be subject to change in the future. Where the total income, including your withdrawal, is above the personal allowance taper threshold, the appropriately reduced personal allowance has been used in this calculation. (For example, State Pension, investment income or other earnings). For the purpose of this calculation we assume that you have other income of £16,000 a year. The amount of tax you pay depends on your individual circumstances and will take into account any other income you receive, including the state pension. It is not a calculation of your personal tax liability. The tax figure shown is a calculation of the tax that would be due on the cash withdrawal, based on our assumptions. that you have other income of £16,000 a year.that you have the full standard personal allowance and no other allowances, for example marriage allowance.that you take 25% of your pension pot as a tax-free lump sum.This is an example only and we’ve used the following assumptions: The tax you pay depends on your individual circumstances and may change in the future. The example shows the gross income before any tax is deducted. This will show how your plan is doing and when it's likely to run out. Once you set up your drawdown account, we'll send you a personalised illustration in your annual statement. The real rate of inflation could be lower or higher than this. Inflation reduces the value of your savings. This gives an indication of what the future value of your pot would be worth today.
An annual rate of inflation of 2% each year.The actual charge will depend on the objective you choose and may vary in the future. The initial example is based on you taking 3.5% of your pension pot in drawdown each year.You take your 25% tax-free cash from your pension pot.It's up to you to choose the options that are right for your individual circumstances.
To give you these examples we've made the assumptions below.
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