PLANNING
TO STOP WORK - PUT YOUR FEET UP?
If you are
thinking about retiring soon or a long time in the future, the questions
that you need to ask yourself are essentially the same:
- When do
you want to retire?
- What income
will you need?
You have
the time between now and your intended retirement date to build up the
funds that you will need in order to provide this income. Where will your
budget come from?
- Do you
have a regular income?
- Do you
have a variable income?
- Do you
earn or plan to receive specific lumps of revenue?
- How much
are you willing to commit to providing for your future income?
- If you
are married, do you both pay tax at the same rate? - you may be able
to save more tax by using the higher rate tax allowance first.
Other factors
to consider, particularly as you get closer to stopping work are:
- Who else
will need to rely on this income?
- What is
your health like?
- What is
your tax and asset structure likely to be when you retire?
- Will you
need/want a cash lump sum in addition to the income?
The next
step is to discuss with your financial adviser, which of these is a priority.
He/she will use the answers to these questions, and their knowledge of
the pension market, to work out a sensible funding strategy that will
satisfy your objectives.
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