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   Retirement Options - Alternatives


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     Being creative and flexible - but not irresponsible   

There is of course a reason why the majority of retirees choose one option rather than another. Part of the explanation is that there may be only one sensible choice - but an alternative explanation could also be that they have not been suitably informed about all the available options and presented with the idea of a Combination Portfolio.   

 

At NFA the term 'Combination Portfolio' has been coined simply to reflect a retirement option which can contain a combination of both annuity elements and draw-down options as well as include alternative sources of retirement income.

 

One example could be a retiree who receives a small final salary pension but also has a stand-alone retirement (e.g. from the sale of a property or similar).

 

If both flexibility and a certain amount of security is preferred, one option may be to split the additional retirement pot into a 'drawdown' section [offering greater prospects for higher yield but with some investment risk] and a 'annuity-portfolio' section with a combination of annuity types.

 

The idea of combining annuities with different characteristics appeals to many retirees in the present uncertain financial climate.

 

They may thus wish to consider a proportion of their retirement fund being allocated to a so-called 'Temporary Annuity'.

 

This type of annuities can offer some breathing space by allowing retirees to buy a secure income for a set period of time, typically five to ten years.

 

In addition to the income, temporary annuities also promise to return a guaranteed capital sum when the plan matures, which can then be used to buy another annuity.

 

For those in, or approaching retirement, there are a number of attractions associated with taking out a temporary annuity now, with the option of moving to a different product a few years down the line when rates have hopefully improved.

 

Temporary annuities also give people in retirement the potential to secure a higher income if they develop health problems after taking out their plan. At the end of the term, they may be able to use the guaranteed capital sum to buy an 'enhanced annuity' which pays significantly more income to those with medical conditions.

 

There are of course also the possibility that annuity rates may not improve in the foreseeable future so the use of temporary annuities could be used in conjunction with traditional annuities, rather than as a substitute, to cover both eventualities.

 

Certain types of annuities may also carry a degree of exposure to e.g. the stock market - so, an 'annuity portfolio' can be constructed in such a manner that it will cater for almost any level of risk appetite or desire for certainty.

 

Setting up a 'Combination Portfolio' for retirement is not a trivial task as many aspects need to be considered [including interactions with state benefits, taxation issues, estate planning, risk tolerance etc.] - so, it is highly recommended that suitable independent professional advice is obtained before this avenue is followed.

 

Topical Issues

 

 PENSION CHANGES 2014

 

New rules allow increased flexibility for pension drawdown arrangements. But there are important aspects which need consideration.

 

   Read More...►

 
 

I don't want to retire right

now - maybe next year, or

the year after...

But, can I afford to cut down

on my work hours already?

     find out more 
 

Is it a good idea to buy an

Annuity now or is it better

to wait?

Should it be a single or a

joint annuity?

     find out more 

 
retired couple

What is the right way to

arrange your Investments?

How much risk can you

afford to take?

How much income can you get?

     find out more 
 

 

LET YOUR MONEY WORK FOR YOU!

 

 

 

 

 

 

 

 

VISIT THE DEDICATED NFA INVESTMENT SITE

►►
 

    Specialist Advice Areas


     Regulatory and Legal changes

    LONG TERM CARE -  

  BE PREPARED...

Long Term Care is an issue that most of us would rather not think about. But should you, or your loved ones, need it later it can be VERY expensive if you have not prepared.

      Read More...

WHAT WILL I GET

FROM THE STATE?

Although you may be entitled to a full or partial State Pension it is important that you also get to know what other benefits and support you may be entitled to in your later years.  Read More...►

WHAT ARE POWERS OF ATTORNEY?

Not very many people are aware of what Powers of Attorney really are or How they Work? You need to know that they In many cases can be of critical importance in a difficult situation.  Read More...►

 

 
 

 PENSION CHANGES 2014

 
 

Is Income Drawdown a ticking time bomb?

Rule changes and low Gilt yields can have a large impact on drawdown Portfolios.

   

   Read More...►

 

 

 

 

 

 

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You are always Welcome

to contact NFA for a free discussion

of your Annuity arrangements

 

Phone: 01603 452686

 

 

e-mail: info@norwichpensions.co.uk

 
     

 

 

 

 

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Registered office: 74 Muriel Road, Norwich NR2 3NZ, Norfolk, England.

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