Income drawdown allows retirees to withdraw money from their pension pot as needed, rather than purchasing a fixed income in the form of an annuity. This method provides flexibility by:
- Control over withdrawals: You can decide how much and when to withdraw your funds, allowing you to manage your income based on your needs.
- Investment growth: The remaining pension pot stays invested, potentially growing and providing more income over time. It’s important to remember your funds could fall in value however, possibly reducing the sustainable income or leading to your funds being depleted before your average life expectancy.
- Adapting to changes: You can adjust your drawdown withdrawals based on changes in your financial situation, health, or lifestyle whenever you would like.