Some simple planning in the years leading up to retirement could mean you achieve a better standard of living in retirement and it need not cost you more to get there.
Moreover at the point of retirement, many people take decisions about how to buy their retirement income without understanding the options or the risks involved. Taking time to obtain independent financial advice could improve your income in retirement, in some cases by £ 000s a year.
Many people merely purchase an annuity from the provider they have saved with. In most cases this means they have not purchased the best income they could have achieved and they will lose money every year for the rest of their lives.
Whilst annuities offer many guarantees for retirement income and there are several benefits that can be purchased with an annuity to protect your future standard of living, there are other alternatives, income drawdown being one of them. This allows you to draw an income directly from your pension fund, whilst the fund remains invested. One of the most attractive features of income drawdown is that it allows you to retain control of your investments. The death benefits under income drawdown are generally more favourable than under an annuity and this is also a popular reason for people to consider this alternative. However, income drawdown is not something to choose lightly. There are risks inherent in this option and you must go in with your eyes wide open. If you do not, you could see your income being reduced very quickly, which in turn would reduce your standard of living.
The simple fact is that if you take time to plan and seek independent financial advice you are more likely to achieve a better standard of living in retirement.
For more information on this subject, or to book a place at the next retirement seminar on Thursday September 24 at The Two Brewers in Chipperfield, please contact:
Chamberlain Stean & West Ltd on 01442 822988 or email them at enquiries@csw-wealthmanagement.co.uk