5 Retirement Choices to Consider

Planning for retirement has taken a whole new direction compared to earlier generations. For starters, people are living a lot longer than previously expected. For example, it is normal today to assume that a 65 year old will live 20 more years compared to the 50s where on average, the retirees would live 10-15 years longer. This means that life plans have to change drastically as people live longer and the need to leave a legacy becomes stronger. It is therefore important that all these issues are put in place when planning for retirement

The Need for Regular Income

Retirement does not mean that you have fewer needs just because the pension is a lot lower than your salary. If anything, you will require a larger income since costs such as healthcare and estate protection go up. With the prospect of living an additional 20 years after retirement, there is a growing need to maintain an income that will cover the cost of living.

5 Retirement Choices to Consider

When it comes to retirement planning, you can take advantage of a variety of choices depending on your preferred monthly income and your current and future financial circumstances. With this in mind, here are some retirement options you can consider for a comfortable retirement.

1. Equity Release

This is a program through which you can get cash against the value of your home or other property. In this plan, you can decide to sell part of or entire property, retain use of it and get your money either as a lump sum or periodically (monthly) until your demise or permanent relocation to an aided care centre. Once you move out of the property, the ownership of the property goes to the equity release service provider.

This is one of the most common options for retiring home owners. This is because you are guaranteed of an income for the rest of your days, and you can still leave an inheritance through everything else you own apart from the house. It is advisable to seek financial advice from experienced professionals such as Equity Solutions ltd in order to get a scheme that best suits your financial situation.

2. Tax Free Pensions

Did you know that you can take your pension in lump sum, move to Portugal and not have to worry about HMRC coming after you to collect tax on your pension? Well, now you do. There are a variety of situations that can qualify you for tax free pension allowances. For starters, the first 25% pension lump sum is tax free. You can also benefit from other tax effective programs. In order to get the best of the tax reliefs, you can always talk to a tax advisor to get you through the process.

3. Annuities

An annuity is simply an insurance policy usually provided by the pension scheme provider to give lifetime income upon annuitization of the pension savings. Annuities, just like all other retirement options, come with a variety of options which are tailor-made to your specific financial situation. You can choose to have annual lump sums, or monthly income depending on your preferences. You can also take advantage of your circumstances such as ill health to get enhances annuity payments.

The good thing about annuities is that you are not restricted to your current pension scheme service provider. In the open market option, you are allowed to pick any annuity provider whose services you prefer. You can also decide to keep your savings invested as you draw down your pension.

4. Employer-Sponsored Contribution Plans

If you are employed, you have been paying defined contributions towards your retirement kitty. These contributions are deductable from your income from the first day of employment. After retirement, these amounts are then paid back in monthly amounts. The amounts you get depend on the amount contributed, the interest or returns earned, as well as the age of retirement. Early retirements attract a small penalty. This option is only available to people who have been in permanent employment with a sponsoring employer.

5. UFPLS and Drawdown Income

These are variable income plans that allow you to draw down as much money as you want whenever you want depending on your contributions. The first 25% of the fund to be released is usually taken as a tax free lump sum, and the rest drawn down according to preferences. When taking up this option, be careful to keep checking your balance as you might draw down a little too much and are left without cash.

It is important to note that retirement planning starts early. If you had not put aside some money before your time comes, you may have a hard time. Most of the retirement plans are permanent. This means that you may need to do your homework well before you settle on any one plan. You can also mix your options to ensure that you are guaranteed of a good income. Talk to experienced financial advisors to get you started on the right path.

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Read what some of our satisfied clients who are now living their lives to the fullest have said about us!

I am truly living my life to the fullest and enjoying the cash benefits of the equity release scheme that Cumbria Home Investment helped me to secure. I really received great advice from this company. Their great advice and tenacious approach made my equity release process so much easier.
Amber W. Strait

My father's solicitor referred me to Cumbria Home Investment. In the initial consultation, their financial adviser spent a considerable amount of time explaining to my mom and me all of the equity release schemes available, ensuring that we understood every pro and con before making a decisions.
Thomas C. Nystrom

Working with Cumbria Home Investment has truly been a pleasure. They made the process so simple by dealing with the different equity providers on our behalf and by offering constant attention to all the details pertaining to my home reversion scheme.
Bradley M. West