Phased retirement Phased retirement Phased


Phased retirement Phased retirement Phased...

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Phased retirement

Phased retirement

Money purchase pension fund

Phased Annuity Purchase

Phased retirement

Phased Annuity Purchase

1

Money purchase pension fund

Phased retirement

2

1

Phased Drawdown Phased Annuity Purchase

Phased retirement

Phased Annuity Purchase

1

Money purchase pension fund

1

Money purchase pension fund

2

Phased retirement

Money purchase pension fund

Phased Annuity Purchase

1

Money purchase pension fund

Phased Drawdown

Phased retirement

Phased retirement Annuity rate 5%

Needs £11,200 net of basic rate tax

Needs £11,200 net of basic rate tax

Phased Annuity Purchase

1

Money purchase pension fund

Phased retirement

Phased Annuity Purchase

1

Money purchase pension fund

Phased retirement

£1,200 p.a. net annuity

£10,000 PCLS

Needs £11,200 net of basic rate tax

£40,000

Phased Annuity Purchase

1

Money purchase pension fund

Phased retirement

Money purchase pension fund

2

Phased retirement GAD rate 4% Needs £8,040 net of higher rate tax

Money purchase pension fund

2

Phased Drawdown

Needs £8,040 net of higher rate tax Money purchase pension fund

2

Phased Drawdown

Phased retirement

Phased retirement

£540 net income £7,500 PCLS £30,000 Money purchase pension fund

2

• Death benefits

Needs £8,040 net of higher rate tax

Phased Drawdown

Death benefits

Death benefits

Uncrystallised fund options

Uncrystallised fund options • Non-protected rights lump sum on death - Tax free on death before 75 - 55% tax if death after 75

Death benefits

Crystallised benefits – Harry

Uncrystallised fund options • Non protected rights lump sum on death - Tax free on death before 75 - 55% tax if death after 75 • Protected rights fund – pre and post April 2012 differences.

Crystallised benefits – Harry

Crystallised benefits – Harry

Non protected rights annuity

Non protected rights annuity • A spouse or dependant’s income

Crystallised benefits – Harry

Crystallised benefits – Harry

Non protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years

Non protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years • Annuity protection lump sum

Crystallised benefits – Harry

Crystallised benefits – Harry

Non-protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years • Annuity protection lump sum Protected rights annuity

Non protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years • Annuity protection lump sum Protected rights annuity • No capital protection

Crystallised benefits – Harry

Crystallised benefits – Harry

Non protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years • Annuity protection lump sum Protected rights annuity • No capital protection • 50% spouse’s pension

Non protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years • Annuity protection lump sum Protected rights annuity • No capital protection • 50% spouse’s pension • Maximum 5 year guarantee.

Crystallised benefits – Harry

Crystallised benefits – Mary

Non protected rights annuity • A spouse or dependant’s income • A guarantee period up to 10 years • Annuity protection lump sum Protected rights annuity • No capital protection • 50% spouse’s pension • Maximum 5 year guarantee.

Crystallised benefits – Mary

Crystallised benefits – Mary

Non protected rights fund • Fund as a lump sum less 55% tax

Non protected rights fund • Fund as a lump sum less 55% tax • Drawdown policy for dependant

Crystallised benefits – Mary

Crystallised benefits – Mary

Non protected rights fund • Fund as a lump sum less 55% tax • Drawdown policy for dependant • Lifetime annuity/scheme pension for dependant

Non protected rights fund • Fund as a lump sum less 55% tax • Drawdown policy for dependant • Lifetime annuity/scheme pension for dependant Protected rights fund • Income for spouse

Crystallised benefits – Mary

Crystallised benefits – Mary

Non protected rights fund • Fund as a lump sum less 55% tax • Drawdown policy for dependant • Lifetime annuity/scheme pension for dependant Protected rights fund • Income for spouse Short term annuity • Continuation of guaranteed payments

Non protected rights fund • Fund as a lump sum less 55% tax • Drawdown policy for dependant • Lifetime annuity/scheme pension for dependant Protected rights fund • Income for spouse Short term annuity • Continuation of guaranteed payments

Phased-Drawdown vs. Annuity purchase

Phased-Drawdown vs. Annuity purchase

Drawdown • Higher lump sum death benefits • No annuity decision • Flexible income

Annuity purchase • No investment risk • Guaranteed income • Simple to understand • No ongoing costs

Phased-Drawdown vs. Annuity purchase Drawdown • Higher lump sum death benefits • No annuity decision • Flexible income

Annuity purchase • No investment risk • Guaranteed income • Simple to understand • No ongoing costs

Timing – when to take your benefits • Wealth

Timing – when to take your benefits

Timing – when to take your benefits

• Wealth • Economic factors

• Wealth • Economic factors • Health

– – – –

Take benefits early Retire later Reduce standard of living Downsize

Timing – when to take your benefits

Timing – when to take your benefits

• • • •

• • • • •

Wealth Economic factors Heath Partner’s age

Wealth Economic factors Heath Partner’s age State pension – Defer for increased income payments – Defer for a lump sum

ST. JAMES’S PLACE R04 – Learning Outcome 102 Drawing retirement benefits – compliance requirements for defined contribution schemes. R04 Chapter 6 Part 1