J
JAMESBROWN
Guest
Hi , after a bit of a trawl through here and other sites , is the following correct or am I missing something?
For simplicity I assume growth of 5% , and tax relief of 50%.
1)I stick 10 grand a year pre tax income into a pension for 20 years so ive got 330 k at the end.I then use this to provide an income which is taxed.
or
2)I stick 5 grand a year post tax income somewhere for 20 years so Ive got 165 k at the end.I then use this to provide an income that is not taxed.
the advantage I can see to 1) is that I can take a tax free lump sum and hope/ensure that my pension income is not taxed at the highest rate.
Am I missing something obvious besides the enforced saving and the tax free lump sum ?
thanks in advance
For simplicity I assume growth of 5% , and tax relief of 50%.
1)I stick 10 grand a year pre tax income into a pension for 20 years so ive got 330 k at the end.I then use this to provide an income which is taxed.
or
2)I stick 5 grand a year post tax income somewhere for 20 years so Ive got 165 k at the end.I then use this to provide an income that is not taxed.
the advantage I can see to 1) is that I can take a tax free lump sum and hope/ensure that my pension income is not taxed at the highest rate.
Am I missing something obvious besides the enforced saving and the tax free lump sum ?
thanks in advance