Not just one option – but many aspects need consideration.

As each person’s situation is individual there is no such thing as the retirement option. Rather, there are a number of options available to most people reaching retirement age.

The exact number of options will largely depend on the size of the retirement pot available (generally speaking, the larger the accumulated sum, the more options will be available) – but even with relatively small retirement funds important choices still have to be made.

In the following it is assumed that you have made some provisions for your retirement either in the form of savings, investments, personal pension plans, work-related pension arrangements. AVCs etc.

When you reach retirement, or decide to cut down on working hours and semi-retire you will most likely need to rearrange at least some of your pension fund(s) in such a way that they start to provide you with an ongoing income (in replacement of your previous salary or business income).

On these pages you will find a brief description of some of the main options which you will need to consider.

However, by outlining some of the available options in brief may be deceptive and give the impression that ‘sorting out your pension’ is just a trivial matter of making a few simple choices.

You need to be aware that the choices you make now, in many cases will determine your situation for the next 10, 20, 30 or more years. So, if the wrong choice is made now, there will be a very long time in which to regret it!

It is a long-held view by NFA that retaining flexibility and room for manoeuvre as long as possible is very desirable – but that this of course should never jeopardize the security of future provisions.

Two points which can be easy to overlook in the retirement decision making process are related to how a future income stream will interact with current tax-legislation and how they interact with means-tested state benefits.

There seem little point in having saved up over a life-time and/or contributed to pension arrangements if the extra income this provides in retirement is passed directly on to the taxman or is used to subsidize benefits which you would otherwise be entitled to.

Only by taking a ‘holistic’ approach and analyzing your overall situation can the optimal combination of approaches be identified which will help to ensure a long and hopefully happy retirement without too many financial worries.