We look at the potential income from a million pound pension and how much this could be at various ages from 65 down to 55. We look at how much income a million pound pension may generate for both flexi access drawdown and an annuity.
For drawdown, to carry out the comparison, we have assumed that the income from a million pound pension is taken to ensure that the drawdown pension fund is extinguished at age 90. For annuities we have given two type of annuities to show you how this effects the income from a million pound pension.
Timestamps:
00:00 Introduction
01:20 Flexi Access Drawdown assumptions
02:44 Income from a £1m pension at age 65
03:52 Income from a £1m pension at age 60
04:22 Income from a £1m pension at age 55
05:13 Summary of the income from a £1m pension via drawdown
05:48 Sustainable Withdrawal Rate’s
10:31 Annuity income from a £1m pension
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Flexi Access Drawdown can be a complex retirement solution and there are many variables to be aware off. If you take too much income from your pension, your life expectancy is longer than on average or your investment returns are worse than expected, there is a real posssiblity you could run out of money. In this example I have assumed the pension runs out at life expectancy. The reality is that this isnt know in advance and so it impossible to plan for and I would always err on the side of caution when thinking about life expectancy.
Website – www.heritage-fp.co.uk
DISCLAIMER:
The content in this video is provided for information and entertainment purposes. It should not be construed as direct or indirect financial advice. You must thoroughly research any potential financial or investment decision and fully understand the risks before taking it. If in doubt, you should seek Independent advice from a professional adviser. Tax rules and legislation is subejct to change. HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen. The Financial Conduct Authority does not regulate tax planning…(read more)
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Income from a MILLION pound PENSION revealed
One of the most iconic milestones in anyone’s life is retirement. After years of hard work and dedication, it’s time to sit back, relax, and enjoy the fruits of your labor. For some lucky individuals, retirement also brings with it a sizable pension fund, allowing them to maintain their standard of living and indulge in their favorite hobbies and interests.
Recently, the income from a whopping million-pound pension was revealed, shedding light on the financial security and comfort that some retirees are privileged to enjoy. The eye-watering figure is a testament to the valuable role that pensions play in securing a stable and prosperous future for individuals after they stop working.
For many people, the idea of a million-pound pension may seem like a pipe dream, but for some fortunate individuals, it’s a reality. This vast sum of money provides retirees with the peace of mind and freedom to live out their retirement years without any financial constraints.
The reveal of this impressive pension income serves as a reminder of the importance of planning and investing in a pension scheme early in life. By making regular contributions to a pension fund throughout your working years, you can build a substantial nest egg that will support you in your retirement.
For those who are yet to retire, the news of a million-pound pension serves as inspiration to start saving and investing in a pension plan as soon as possible. The earlier you begin contributing to a pension scheme, the more time your money has to grow and accumulate, ultimately leading to a more substantial retirement fund.
Furthermore, the reveal of a million-pound pension sparks conversations about the disparities in retirement income and the need for financial literacy and guidance. Many individuals may not fully understand the different pension options available to them or how to maximize their savings for retirement. It is essential for financial advisors and pension providers to offer comprehensive and transparent information to help individuals make informed decisions about their pension funds.
Additionally, the news of a million-pound pension also captures the attention of policymakers and experts, prompting discussions about pension reform and the importance of ensuring a secure and stable retirement for all individuals. It highlights the need for measures that prevent pension poverty and ensure that everyone has access to suitable pension options that adequately support them in their retirement years.
In conclusion, the reveal of a million-pound pension income is a striking example of the significance of pensions in securing a comfortable and prosperous retirement. It serves as a reminder for individuals to start saving and investing in a pension early and for policymakers and experts to work towards creating a fair and equitable pension system for all. Ultimately, the news of a million-pound pension prompts conversations and actions that aim to improve the financial security and quality of life for retirees.
I think these videos should encourage normal retirement at 67, with early retirement at 65. Save for health issues, retiring at 60 is far too young and many will regret it after a couple of years of doing very little, and when every day feels like a Sunday…
It always interests me the focus on early retirement , rather than creating a balanced life that isn’t so miserable that you wanted to run from it, which seems a more achievable target for most. I’m 61 have achieved the ‘target’ amount but happy to keep working as self employed consultant working about 250 days a year and will keep doing so to state pension age of 67. When DBS pensions kick in at 65 I’ll stop putting into pensions and savings and start spending more on holidays and life.
Nice video. However i think it's more relevant that people understand what they need to retire. This number is different for everyone. Some live more frugally with less lavish lifestyles and can squirrel more away each month and live a very comfortable retirement on, say £15-20k a year..
It would be good to see what size portfolio can be achieved by putting different amounts of monthly contributions into pensions and ISAs each year….increasing with inflation each year.
How many people can enjoy £1m pension income at 55? Just a certain minority compared to those at 65. Then assuming you also take 25% tax free income out of it then you are left with 750k only.