Tideway’s Income In Retirement Calculator allows an individual or couple to model their projected income in retirement starting with the capital balances available to them at outset in the three most commonly used investment accounts:
Using the amount entered in each investment account the calculator will show how the funds could be invested for a medium risk investor across each account. It then estimates and adds the pre and post state pension age income available, pre and post-tax for a given level of capital consumption by age 90.
The calculator is a guidance and planning tool only and should not be construed as advice to invest in any particular investment or investment account. The incomes shown are estimates and in practice will be subject to varying investment returns and varying tax rates over time.
Output 1 shows how your funds might be invested across a range of asset classes each providing a different function in the portfolio:
|Investment Asset Class||Purpose in the portfolio|
|Short Dated Bonds
These are funds investing in listed corporate bonds issued by large, mainly UK companies with known interest payments and relatively short terms to anticipated maturity, usually less than 5 years
|To stabilise the portfolio and provide low risk returns and a buffer to cover withdrawals over and above the income generated by the portfolio after fees|
|High Yield Bonds
These are funds invested in listed corporate bonds with longer terms to maturity, usually 5-10 years.
|To make predictable longer-term returns based on fixed interest payments from loans to large companies where returns are above inflation after fees|
These are funds invested in things like infrastructure, real estate, green energy projects usually via liquid listed companies trading on the major stock markets
|To provide diversification away from equity and bond markets and to generate combined income and capital gains ahead of the rate of inflation after fees|
These are funds investing in the shares of worldwide companies listed on major stock markets whose shares offer attractive and growing dividend income whilst also offering the possibility of capital growth
|To generate attractive and growing income payments with the possibility of additional capital gains and total long term returns ahead of inflation after fees|
These are funds investing in worldwide companies listed on major stock markets whose shares offer attractive prospects for capital growth
|To generate capital gains with long-term total returns ahead of inflation after fees|
Output 2 shows how the various investment assets could be allocated across the investment accounts held in the most tax efficient way whilst retaining a sensible overall mix to meet the needs of a medium risk investor investing for the long term.
Output 3 shows the amount of income that could be reasonably drawn from your accounts based on the level of capital consumption you select and are prepared to accept by age 90.
The income is shown at levels before and after your state pension commences and before and after the estimated tax you would pay on your investment returns and income withdrawals.
You can recalculate for more or less capital consumption, or different balances in the various accounts by changing the input boxes and then clicking the ‘calculate’ button.