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