Phased or partial drawdown has become a buzzword in retirement planning and is the process of drawing on a fund in stages rather than all at once.
Phased drawdown can be particularly tax efficient, both in terms of death benefits and in the money taken from the plan, and can work with both capped and Premium Hermes Victoria Tote Orange flexible drawdown.
Billy Burrows of the Better Retirement Group: In phased retirement, you cut a piece of your pension each year. Some use the tax-free cash for income and the balance is invested in either an annuity or drawdown.
One of the advantages is that if you die the untouched portion of your pension fund can be passed to your family without deduction of tax.
Donât just maximise, optimise
Optimise rather than maximise . Thatâs the advice from pension experts who say that too often people in retirement sac Louis Vuitton Pas Cher focus on the annuity rate rather the shape of their benefits.
There is no second chance when you are buying a lifetime annuity . . . youâre locked in for life, explains Ros Altmann, an independent pensions expert.
Shopping around is important, but many people arenât making the right decisions when Hermes Birkin Bag Dark Blue Silver they need to take into account other factors, not just rate alone.
The shape of the income includes considering how your spouse or partner can also benefit from your savings, inflation protection, and finding an annuity that pays more if you are in poorer health or smoke.
Most annuities are bought by men and they are âstandardâ, single life and level, adds Altmann.
With annuity rates where they are currently, if the man dies within 10 years, he wonât get his money back. So understanding spouse cover, and partnerâs cover, is important.
Another consideration is preserving income against the ravages of inflation. Nine out of 10 annuities sold in 2011 were level and will remain Hermes Birkin Bag Red Golden frozen at this rate.
It is also possible to boost annual income by up to 40 per cent by shopping around for an enhanced or impaired life annuity which pays more to those in poorer health, or who smoke, because they arenât expected to live as long.
Not all pension providers offer enhanced rates, so use your open market option to shop around either by using an independent financial adviser, who will charge a fee, or an execution-only service, which takes commission.
Enhancements can be made for common conditions such as high blood pressure and diabetes and for smokers, but the biggest enhancements are for those with more Louis Vuitton sac serious illnesses such as cancer.
[/quote]If Hermes Kelly Bearn Gusset Wallet Orange you are seeing a financial adviser, ask them if they are using the common quotation form to provide âfullâ underwriting, because we have found that full underwriting leads to better income,[/quote] says Stephen Lowe of enhanced annuity provider Just Retirement.
New services that have launched online allow customers to search the market from the comfort of their laptops, but still charge a commission of up to 3.5 per cent, in some cases, for a sale that is unadvised.
There can be a lot of pitfalls to buying without advice, from not quite getting all the right medical information to enhance your rate, to not getting the right shape of the annuity, says Bob Bullivant of Annuity Direct, an independent financial adviser.
You also need to understand that if there are benefits to keeping your pension with your savings provider, rather than buying elsewhere, such as if you have a guaranteed rate. Unless you really know what you are doing you should proceed with caution when buying direct. |
