![]() ![]() That assumes annual investment growth of 5pc and income increasing by 2pc every year with inflation. ![]() By opting for the drawdown strategy, they could take a much larger income of £6,747 every year until age 85, or £5,025 if they wanted it to last until age 95. Running out of money during retirement is the biggest risk with this flexible approach so it is important that those opting for drawdown do not withdraw too much, too soon.Ī 65-year-old with a £100,000 pension who used their whole pot to buy an annuity would get a yearly fixed income of £3,860. The secure source of income has lost value in five out of the past six years. This is largely down to a deterioration in annuity rates. Retirement planning is highly personal and will depend on various factors, including how much you need to live on, your health and how much you have saved.īut whether you have £100,000, £500,000 or £1m saved up in your pension pot, drawdown will always give you the highest income, according to figures compiled for Telegraph Money by financial planners at Brewin Dolphin. Which is the best for retirement income: annuity or drawdown? While this may work for most retirees, a guaranteed income for the rest of your life does have its merits. ![]() Many have favoured the more flexible option of dipping into their nest egg as and when they need the cash, known as “drawdown”. The once-favoured annuity has fallen in popularity as rates have dropped to the extent most buyers are unlikely to get even their initial investment back. But with choice comes more responsibility, and more room for error. Retirees have more options than ever before when it comes to how they want to spend their pension pot. ![]()
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