Copy article

MoneyWeek article- how much income will you get from a £250,000 pension pot

Journalist: Marc Shoffman, Freelance

ended 15. May 2024

 

I am working on a MoneyWeek article this morning looking at how much income you could get from a £250,000 pension pot.

It would be good to get commentary on how much you would need to save and for how long to reach this target and the type of annuity income you could get as well as how to manage it in drawdown. 

How can you make sure it doesn't run out and how tricky could it be to save this much?

What are the tax implications?

I would ideally need comments by around 1230. 

Thanks, Marc

1 responses from the Newspage community

Copy all

Copy

Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
People often underestimate how much money they need to put aside to be able to enjoy a comfortable retirement.

If you invested £250 per month for 33 years, assuming a growth rate of 5% per year, you would build up a pot worth approximately £250,000.

If you increased your investment by £100 to £350 per month, you would have approximately £350,000 at the end of the 33 years.

A little increase goes a long way.

Most couples will now enjoy a three decade retirement so £250,000 is not going to last very long.

Using the crude 4% rule, £250,000 will give you an income of £10,000 a year.

Nowadays, most of us Financial Advisers will create a bespoke lifetime cashflow for you to work out how much you are going to need in retirement and how much you should invest to be able to achieve this.