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Pension Planning

Your ability to enjoy a long and fulfilling retirement will largely depend upon how well you accumulate assets now.

In many cases, people passively accept whatever pension is available, being forced to perhaps continue working and adjust to a lower standard of living.

At Optimum, we prefer a more proactive approach. Our review service starts by assessing the level of income required, understanding your existing provision and if it will be too low for your needs, work with you to develop a strategy to help you build up the funds required.

Whist the State is looking to extend our working lives (State Pension age will be 66 by 2020, rising to 68 by 2046 for both men & women) our experience is that people's expectations are quite the opposite with many looking to provide the option of retiring earlier and enjoying retirement to the full. It is therefore strange that many people have not considered: -

Level of retirement income you will need

Are you on target to achieve your desired retirement income?

Suitability of existing provision. Key issues include assets held do not match attitude to risk, poor investment performance, high charges and security of pension scheme.

Taking full advantage of any employer sponsored benefits

Likely State Pension provision

Tax benefits of pension investment

Having spent your working life building your pension fund now approaching retirement, it is crucial to make the right decisions on how you arrange your retirement income.

Nowadays, investors have much more flexibility when it comes to deciding how and when to take their benefits. The main options are: -

Annuities: converts your pension fund into pension income and will be paid to you for the rest of your life. Can provide a guaranteed level of income or be investment linked.

Income Drawdown (Capped & Flexible): allows people to take an income from their pension savings while still remaining invested. You decide how much of your pension you want to move into drawdown and then you can normally take a 25% tax free lump sum and draw a flexible income from the rest.

Phased retirement: allow you to split your pension fund and buy annuities at different times. Can also be used in conjunction with Income Drawdown.

Whilst the alternative retirement choices offer undoubted greater flexibility it is even more important to seek professional guidance when making these decisions as such action will affect your income for the rest of your life. Unfortunately, it is still common for investors to simply accept the benefits offered by their pension provider.

Work with us to discover how to tailor a retirement planning strategy to your specific needs and maximise your post tax income in retirement.

Please see the specialist pension qualifications held by our consultants in "Consultant Profiles."

The value of investments and income from them can go down as well as up and is not guaranteed.

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