Retirement options.

One.

Use a TR plan and buy an annuity to fund your retirement.

Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year.
Oct 22

Gambling with your future.

When you want to buy your annuity, interest rates could be low and the annuity would pay peanuts.

Also you have to surrender all your capital, so not an option for this blog.

Two.

A TR plan where the end destination is unknown as you have no idea of how much your portfolio would be worth as markets may have crashed just before you start drawdown.

With a TR plan it’s recommended you withdraw 4% of your portfolio every year, maybe best each January, hoping to benefit from a Santa Rally.

Three.

A dividend re-investment plan, where you can plan on the end result based on the number of years you have to re-invest.

The Snowball’s ten year plan is to produce income on 100k of seed capital of

around 14% pa. With compound interest you will make more in the last few years, than in all the early years, that’s why a plan is such a poor plan.

The problem, over 30 years of investing, an outsized amount of the wealth is generated in the final 10 years.

For example, let’s say I put £1,000 to work at 10% average returns. By the 20-year mark, my money has climbed to £6,728. By the 30-year mark, £17,449. Over half of all the investing returns come in the last third of the process.

That’s why Lifestyling is such a bad idea.

To earn 14% pa with a TR plan you would need to make a gain of £250k, of course you may not and have to keep working.

You could have a part TR/Dividend re-investment plan and use any gains to buy more shares in your dividend re-investment plan.

2025 Fcast Dividends of £9,120 (slightly ahead of plan)

The comparison share VWRP income using the 4% rule £5,160, this figure could be higher or lower at the end of 2025, that’s the gamble.

Remember without a plan you have no idea of your destination and bad plan is better than no plan GL.