Your chart explained!
The chart shows you how your fund could perform in Drawdown based on the parameters you have added. It allows you to see what the fund might be worth at certain ages, which might assist in terms of legacy planning. It also allows you to see when your pension fund might run out.
Based on your desired income and targeted annual return, the line indicates how long your pension fund will last if you continue to withdraw £0pa.
Based on your risk and targeted annual return, the line shows that you could have a sustainable income of £0pa from your pension fund up to age 100.
To produce these calculations we have made some initial assumptions about investment growth (which are not guaranteed) and life expectancy. The assumptions we have made do not constitute personal advice and are not based on your circumstances. They are simply a starting point.
It is important to remember that your investments will fluctuate in value (rather than growing by a steady percentage each year as shown in this calculator). There are likely to be times when your investments fall in value.
Please remember investment growth may be higher or lower than assumed. You may also live longer or for less time than assumed.
Expected Growth Rate – The growth rates noted are real rates of return, net of inflation and charges. The lower than expected returns assume the noted return is not achieved. These returns are not guaranteed, and the actual average long term return might be higher or lower than the figure noted.
Risk – As you take more risk, the theoretical or expected growth rate rises but actual returns may differ. The range of potential outcomes increases as you take more risk. Whilst your fund potentially could achieve a higher end value, the chances of the worst case (the value falling) increase as you take more risk.
Projected Fund at Retirement – This is the CETV on offer, grown to the selected retirement age by the expected growth rate.
Projected Income – This is calculated on the basis that you need your pension fund to last through retirement to age 100. It works on the assumption that your fund will be exhausted by the point you reach this age. This is not a recommendation and your circumstances could dictate that it is appropriate to take less income. The income is not guaranteed.
Tax – We have assumed your target income to be a gross (before tax) figure. The outputs from this calculation are also gross.
These are examples and provide estimates only. The results should not be relied upon and you should seek professional financial advice from a qualified final salary transfer specialist before making any decision.