The Snowball

The current ten year plan.

Option one.

The retirement plan is to have a Snowball providing income of £20,000, a yield on seed capital of 20%.

Option two.

Using the control share VWRP and compounding at 7%

£284,000 and using the 4% rule that would provide income of £11,360

but you would retain your capital, which could be higher or lower.

Option three.

Use the capital which could be higher or could be lower, that’s the gamble you would take with your retirement an buy annuity increasing by 3% a year.

Let’s use a figure of 5%: £14,200 but you have to surrender your capital and live around eighteen years just to receive your cash back on an 100k annuity.

The gamble is the annuity is based on the current interest rate when you retire so could be

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

Control, what you can control unless you are a gambler. GL