In a perfect world, we can visualise ourselves retiring and living off the interest on our investments. Our capital stays intact and everything is moonshine and roses.
Is it possible to retire on interest only? It is a possibility if you have more than you need in your pension pot.
Let’s say you have £1 million in your pension pot at retirement. If it is invested at 6% annually, that’s £60 000 a year in retirement money. Added to that is social security/national insurance old age pension and possibly a company pension scheme. When you die, your beneficiaries will receive the entire £1 million.
Unfortunately, most will not have enough saved up to achieve this. If your goal is to try and live on interest only or at least minimal drawdown, then you need to consider a few things.
Try to rely on your company and state pensions and savings as much as possible to take the strain off your private pension’s capital.
It is vital that you discuss your ideal retirement with your financial adviser. They can help plan the intricacies of retirement income, and ensure that your desired retirement lifestyle remains the same throughout your retirement years and that you don’t end up with a shrinking income. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.
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