{"id":610,"date":"2013-10-28T10:35:06","date_gmt":"2013-10-28T10:35:06","guid":{"rendered":"http:\/\/www.esmartproducts.co.uk\/wordpress\/?p=610"},"modified":"2013-10-28T10:35:06","modified_gmt":"2013-10-28T10:35:06","slug":"what-to-consider-if-you-are%e2%80%a8approaching-your-retirement","status":"publish","type":"post","link":"https:\/\/www.vizionwealth.co.uk\/news\/what-to-consider-if-you-are%e2%80%a8approaching-your-retirement\/","title":{"rendered":"What to consider if you are\u2028 approaching your retirement"},"content":{"rendered":"

Make sure you have enough income to provide for your needs in the future<\/strong><\/p>\n

Sooner or later we will retire, and the decisions we make today are the ones that will determine the standard of living we will enjoy in the future. If you are approaching your retirement there are some very important choices you need to make that will determine how much income you live on once retired.<\/p>\n

Firstly, you\u2019ll need to check your personal, company and State Pensions. You must make sure you have enough income to provide for your needs in the future. If you are planning on using your pension to buy an annuity when you retire, it is essential that you don\u2019t just accept the deal offered by your pension provider, as you could potentially lose out on a significant amount of money over the lifetime of the annuity.<\/p>\n

Exercise your \u2028\u2018Open Market Option\u2019<\/strong>
\nYou should always exercise your \u2018Open Market Option\u2019 that will enable you to get the best possible deal for your pension fund. Comparing the different rates available \u2013 instead of buying an annuity from the company with whom you have built up your pension savings \u2013 could result in an increase to your retirement income of up to 40 per cent depending on your circumstances.<\/p>\n

You can buy your annuity from any provider and it certainly doesn\u2019t have to be with the company you had your pension with. The amount of income you will receive from your annuity will vary between different insurance companies, so it\u2019s essential that you receive professional financial advice before making your decision.<\/p>\n

Don\u2019t forget about inflation<\/strong>
\nAs you are likely to spend around 20 or even 30 years in retirement, remember that inflation could have a serious impact on the purchasing power of your savings. If you have opted for an inflation-linked annuity rather than a level annuity, then you will have protection against the rising cost of living.<\/p>\n

Work out carefully how much income you need to draw<\/strong>
\nWhen you retire, you don\u2019t have to go down the route of purchasing an annuity. An alternative to purchasing an annuity is to leave your pension invested and take a portion of the pension pot each year as an income, hence the phrase \u2018income drawdown\u2019. This option may also mean that you could possibly leave your family some legacy when you die, as your pension pot, after tax of 55 per cent, passes on to your family according to your wishes. However, if you take out too much, your capital could soon be eaten away. But the upside of not buying an annuity is that your funds remain invested with the potential for further growth.<\/p>\n

Another route worth considering is flexible drawdown<\/strong>
\nTo qualify for flexible drawdown you must \u2028have a guaranteed pension income of \u2028\u00a320,000, known as the \u2018Minimum Income Requirement\u2019. If you are eligible, then you can withdraw the rest of your pension fund in a manner that best suits your circumstances, whether that\u2019s in its entirety or in part withdrawals. It is often sensible to make withdrawals over several years though, as you still pay income tax on any withdrawals, so the larger the withdrawal the more tax you\u2019ll pay.<\/p>\n

Have you forgotten about any other pensions?<\/strong>
\nIt can be easy to lose track of pensions over time, especially if you move from job to job, \u2028but you can locate a lost pension by contacting the Pension Tracing Service online at \u2028www.gov.uk\/find-lost-pension. This service is free, and if they locate your pension they\u2019ll give you the address of your scheme provider.<\/p>\n

While annuities are generally guaranteed to be paid, remaining invested and using drawdown means that the value of your pension, and the income from it, can go down as well as up. Therefore there is a chance that you may not get back as much as you would by using an annuity. Drawdown is a high-risk option which is not suitable for everyone. If the market moves against you, capital and income will fall. High withdrawals will also deplete the fund, leaving you short on income later in retirement.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Make sure you have enough income to provide for your needs in the future Sooner or later we will retire, and the decisions we make today are the ones that will determine the standard of living we will enjoy in the future. If you are approaching your retirement there are some very important choices you… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":740,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,5,6],"tags":[60,86,127,163,188],"_links":{"self":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/610"}],"collection":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=610"}],"version-history":[{"count":0,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/610\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}