Lifetime Planner - Sequencing which accounts are used for drawdown / tax rates RRS feed

  • Question

  • Hi

    I am just building a Lifetime Planner model in MS Money since it still seems to be the best tool for the job unless anyone has found one better?

    I had a couple of questions:

    Can I sequence the order in which accounts are used to fund expenses after retirement. For example I may wish to draw down upto £xk per year from our two pensions to be tax efficient and then cash in my ISA's to make up a shortfall.

    This will help me optimize tax liability and hence my second question. How does MS Money compute the tax bill in the Lifetime Planner and does it know the difference between Income tax vs. Capital gains.

    In the example above there may be 4 different tax rates:

         25% lump sum tax free upon starting to draw down my pension

         Normal income tax rates on other pension drawdown

         CGT free income on ISA's

         Zero tax on use of savings

    I know you can configure tax by income stream do I need to do this per account to identify the charge which should be applied?

    Many thanks


    Saturday, June 10, 2017 12:13 PM

All replies

  • I have stuck with Money 2000 which does not include the Lifetime Planner, so I can't tell you how to use it. However, I am now UK based and I have done what you may be trying to do ~ plan for retirement (using excel) . With the benefit of 17 years hindsight I can see that almost my original assumptions were wide of the mark ~ and my conclusion is that perfect retirement planning simply isn't possible.

    The demise of tax credits on UK dividends and the introduction of a personal dividend allowance is a perfect example of a change in the environment that will affect your optimum course of action (split between investments for income or for capital growth) but which could not (really) be predicted.

    Concentration on share selection has worked for me and have I only given passing attention of tax minimization ~ I recommend that approach.


    Friday, June 16, 2017 9:18 PM