Although a few years to go yet, I would like to retire at 55 if possible and am thinking of starting a SIPP, which will provide a yearly income until I reach 60, when my DB pension will start.

Lets imagine I have Â£57,500 in my SIPP by the time I reach 55, so Â£57,500 shared by 5 years is Â£11,500 per year (personal tax allowance from April). By the time I reach 60, the SIPP will be exhausted.

Obviously, I am aware the personal tax allowance will have risen by then, so these calculations are only hypothetical on current rates.

Can this amount (Â£11,500) be withdrawn each year tax free, as I won't be working and I would be using this amount as my retirement annual income?

Thanks.

### #2

Don't forget your 25 % TFLS.

So you could actually have a pot of Â£76666 and withdraw it over 5 years to zero and pay no income tax.

Year 1 25% tax free (Â£19166) + Tax allowance (Â£11500)

Years 2 -5 Â£11500 each year.

Gives you an average annual retirement income of Â£15333.

Figures rounded and not account of inflation or investment gains of course.

So you could actually have a pot of Â£76666 and withdraw it over 5 years to zero and pay no income tax.

Year 1 25% tax free (Â£19166) + Tax allowance (Â£11500)

Years 2 -5 Â£11500 each year.

Gives you an average annual retirement income of Â£15333.

Figures rounded and not account of inflation or investment gains of course.

### #3

Theoretically you can now have upto Â£22500 taxable income before you'd have to pay any income tax (in 2017:18) but that would involve a very specific mix of pension (or wages/business profits), savings interest and dividends

Your sipp should be fine providing you genuinely have no other income in the years you draw down from the sipp

Your sipp should be fine providing you genuinely have no other income in the years you draw down from the sipp

### #4

“

Don't forget your 25 % TFLS.

So you could actually have a pot of Â£76666 and withdraw it over 5 years to zero and pay no income tax.

Year 1 25% tax free (Â£19166) + Tax allowance (Â£11500)

Years 2 -5 Â£11500 each year.

Gives you an average annual retirement income of Â£15333.

Figures rounded and not account of inflation or investment gains of course.

Originally posted by NoMore

”

Or could use UFPLS (google it) and withdraw Â£15333 each year with no tax to pay.

### #5

Thanks zagfles, forgot about UFPLS, slighlty different way to withdraw it but the maths work out the same either way for average yearly tax free income over the 5 years.

### #6

Thanks for your input everyone, definitely given me something to think about and do. Now got to think about what SIPP portfolios to buy !

### #8

Been looking around. Think I'll go with the Vanguard Target Retirement 2025 Fund for the SIPP. Seems to suit my needs.