As successive governments keep reminding us, too few people plan properly, if at all, for their retirement; too few people appreciate that an investment now is an investment in their future throughout retirement. So, if you are reading this, you have the edge over that particular group of people and are poised to do some serious planning for the day you can stop working for your living. It is then that you will want to rest easy in the knowledge that the retirement investment advice you were given was the best there was.
And how can you ensure now that you are taking the best retirement investment advice? The only sure way is to consult an independent financial adviser about the long list of questions which you will inevitably need to be able to answer in order to be given the best advice on the type and highest-performing retirement investment options to suit your particular circumstances.
For example, here are some of the questions on which your independent financial adviser should be able to help in order to steer you towards the best retirement investment advice:
I want a regular income when I enter retirement, so just how much will my current pension plan or investments produce? The earlier you start to address this question, of course, the closer you will get to achieving the income you need;
Will I need to buy an annuity? Even if the answer is yes, you are not done yet! Your options remain wide open still. When it comes to pension annuities, are many more choices than a standard, fixed income annuity. Your independent financial adviser will want to run through these options with you. He or she will want to ensure that before you take the serious plunge of a long-lasting commitment to a retirement annuity you have considered all of the available choices and come up with the one that is just right for you;
How flexible is my retirement date? Until April 2010, you can start to draw a (taxable) regular income from your pension fund as soon as you reach the age of 50 After April 2010, that age-limit rises to 55. But how early (or late), would I, realistically, want to retire; how flexible is my retirement plan with respect to early retirement; and by how much would my income change if I changed my retirement date? Again, these are all vitally important questions that you would want to discuss with your independent financial adviser.
Where do I stand with respect to Income Tax? It is not necessarily a straight forward question of all pension income being taxable. Some of what you receive certainly will be taxable, but other sources may not. Tax on your receipts during retirement can be something of a minefield – a minefield which your independent financial adviser will be able to help you negotiate more safely and securely;
The same goes for Inheritance Tax, I suppose? Quite right. Staying the right side of the taxman on questions of inheritance is equally fraught and independent retirement investment advice will help you to pick your way through the snares and pitfalls;
What happens to my dependents when I die? The retirement investment advice from your independent financial adviser will also ensure that whatever your concerns for your surviving dependents, these are reflected in the investment decisions that need to be made.
Steve A Wright