The Basic Rules Of Retirement Planning

For most people the minimum age that you can retire is 50, although from 6th April 2010 this will increase to 55. You must also have started to take the benefits by the time you are 75.

You will normally be allowed to take some of the money as a Cash Sum and this is currently Tax Free. For most people, the amount of cash that can be taken will be 25% of the total pension fund.

The rest must be used to provide you with an income. For many people this will involve buying what is called an annuity (pension) that is paid for your lifetime, although there are now other ways of taking the benefits and these are covered in the other sections.

In some circumstances you are limited as to the type of pension you buy, but in most situations you have considerable freedom as to what benefits your pension will provide and finding the right one will depend on what your circumstances are. For example whether you want to include a “spouses pension” if you are married or in a civil partnership, or if you need a pension that helps retain its value by increasing each year.

Other factors that may influence your decision are your state of health, and your family history of longevity.

You do not have to take all of your pension benefits at the same time, nor do you have to stop working in order to start taking your pension benefits. This means that you can tailor your pensions to suit your own circumstances, whether that is to help you gradually ease into retirement or perhaps even to help with tax planning.

Making the right decisions when you stop working and start your retirement is very important indeed and the financial consequences far reaching. Today’s pensioners are living longer and someone at age 65 in average health can expect to live for another 20 years or so.

There is much more flexibility these days as to when and how you can take the benefits from a pension plan, and it can pay dividends to talk to one of our Independent Financial Advisers who can help you plan your move into retirement, however swift or gradually that may be.

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