“If I was a Financial Adviser I would… know my retirement options BEFORE retiring”
Decisions around retirement.
So, you are nearly there. Finally.
You are about to arrive at retirement when your days will be filled doing things you really want to do. Ah it sounds like bliss. Travel, golf, time with family, the list goes on.
Just the small matter of figuring out how much money you will have to eat, travel, pay bills, and tick items one by one off your bucket list. And then to do all this on repeat for lots of years ahead.
Most of us will have some form of pension in place. It might be small or indeed it might be substantial, but when it comes to drawing down your pension you will be presented with options. Lots of them.
Once upon a time pensions were simple things… ok simpler things. You got a lump sum tax free and you then got a regular income for the rest of your days, no matter how long that happened to be.
Now there are lots of choices and options and plenty of jargon to go with it.
Tax free lump sums amounts can vary in size but are limited. You can have multiple pensions with a variety of employers and providers. You will be faced with choices between Trivial Pensions, annuities, Approved Minimum Retirement Fund’s or simply an Approved Retirement Fund. You will also be faced with a variety of providers, charges and investment strategies. Then there is the old age state pension too. When will that start and how much will that be?
You know these decisions are important and but you also know they are complex. You will receive a benefit decision form from your pension provider. This will list the various options available and ask you to decide.
Each option has implications and some of these options, like an annuity for example is not reversible. So, my advice is to please beware, you must make an informed decision.
Normally at this point I would start to explain each of these options but the reality is that recommending an ARF to one client may be the best advice possible for that client but an annuity for another may absolutely be the way to go.
Each person’s situation is very different and really, it’s the requirements and needs of each client individually that drives the decision about what they should do. As a result, there is no point explaining the ins and outs of each product, we must start this process by looking at the client, not the pension fund. It’s the client’s circumstances that drives the decision around how your pension should be drawndown, not anything else.
Pensions are limiting and worthwhile all in the same breath. Too often we have come across clients who made decisions around retirement that did not suit their needs and could not be undone.
Please, if this is you, and you have retirement on the horizon, just get in touch because understanding pension lingo is like trying to understand a different language. And when you are making decisions regarding your future it’s probably better to use an interpreter than take a punt on it!
As always, if you would like to run anything past us, you can contact me directly on firstname.lastname@example.org or on 01 531 0571.