Major changes proposed in the 2014 budget are expected to significantly change the way you fund your retirement years. In the future you will be able to use your pension in much the same way as any other money that you have saved. The challenge will be deciding which asset source to draw monies from and at what pace.
The basic rules of managing your money to last the rest of your life will not change. The main difference will be that you can decide which is the best way to suit your circumstances, rather than being told by an Insurance Company how much they will give you, take it or leave it.
For some the certainty of having a guaranteed income will be important, for others the flexibility offered by the new proposals will be far more attractive.
One thing is certain, trying to do it on your own is going to get a lot harder. You will now have the opportunity to look at more than a basic annuity. Considerations regarding portfolio construction, paying as little income tax as possible, inheritance tax and succession planning should now become part of your decision making. Being aware of the implications of losing your money to fund long term care is also another thing to consider. The potential for making the wrong decision has increased significantly, especially when the government are already saying that they expect the receipts for income tax to increase signifcantly because of this new legislation, and this is before the new rules have even began .
So whether you are saving for retirement or are due to retire in the near future, it is essential that you seek advice, the options are endless, and the decisions that you make could affect the rest of your life.
Did you know that some pension plans have guarantees that can be lost if you make the wrong annuity choice and that some providers will pay you more if you smoke or have certain health conditions. You do not have to take the annuity from your current provider, so before you make a decision that will have to last for the rest of your life, give us a call it might just make a difference.