If you’re on the verge of retirement and still struggling to see your options, you may have found yourself in a pickle especially if you have contributed the bare minimum to various RRSP’s during your lifetime. However, don’t let your anxieties get the better of you; here are a few ways in which you can help save money during your retirement:
- Selling your house before your retirement can save you a heap of money and is beneficial should you find yourself next to broke approaching the time of your superannuation however this option only works if you’re willing to downsize your property. By this I mean investing in something slightly less expensive that will still provide you with comfort and all the necessities you need for a relaxed retirement.
Say you sold your home for £500,000, the most appropriate option is to purchase a home within the £200,000-£300,000 region leaving at least £200,000 spare to invest in something that generates an income such as a fixed term annuity.
- Once you have downsized your home, it is time to shop around for an annuity. It is crucial that you compare the best pension annuity rates in the UK before you go on to choose the most reliable and best rate pension provider. Not many soon-to-be retirees realise that shopping around can not only save you money but also significantly increase your income to provide you will a more secure life during retirement.
- In the case that annuity rates are low, perhaps consider developing a source of passive income to assist you during your retirement. Those with greater expertise are likely to look at purchasing a rental property to aid them in the rental process however it’s just as easy to transform one of the spare rooms into a guest room for your residents to stay.
These are just a few ways that you can prepare yourself for a comfy retirement in the event that you are a little stripped for cash. For more advice on how to enhance your annuity, speak to a specialist annuity advisor today and see what you can save.
A recent divorce can often be an unpleasant process especially in the event that one or both of you suffer from ill health ranging from mild to acute conditions that affect the quality of your life and your ability to carry out daily tasks. However, if this is the case then it is imperative that you receive the correct legal and financial advice regarding pensions as often these two events can coincide causing a series of added complications should the situation be left unsettled.
In most cases, the basic approach to any divorce settlement is that the couple receive equal amounts of pension income in order to treat the event without bias. However, this is not the case with impaired life annuities in relation to the event of divorce. Should you or your partner suffer from a lifelong medical condition then it may be the case that you will be entitled to purchase a slightly higher annuity than your healthy spouse for the same deposit.
If this is the case, it is crucial that you make your legal advisors aware so they can begin to tackle the situation head-on. If the advisers were not made clear of this health problem then the healthy spouse may find themselves worse off in comparison to the spouse suffering from a lifelong heath issue should the pension be divided equally.
An impaired life annuity within divorce agreements can effectively provide a partial resolution to the problem of their being too little pension to be shared between the spouses so by maximising the income for the spouse suffering from a health issue, you are therefore providing both spouses with a significantly increased fund.
When it comes to the time to purchase your impaired life annuity it is vital that both you and your former spouse shop around for the best pension annuity rates available on the market to ensure that you receive the greatest income possible.
Fixed term annuities are a safe, secure option that guarantees you a steady income throughout your retirement, however, many couples or single retirees struggle to find ways to make the most of their relaxing retirement and often waste the time that they have left pondering over the options available.
As a single retiree, it can often be difficult engaging in enjoyable activities especially if you have no one to share the experience with so a retirement community may be the ideal way to dig yourself out of the retirement rut.
A retirement community is a fantastic option as it enables you and your partner or yourself to spend the rest of your retirement living in comfort and luxury. It also offers you the opportunity to meet new people who are of a similar age and interest which will eliminate the worry of fitting in and bring you closer to other couples or individuals currently in the same boat. Not only this, retirement communities often are said to bring closure to an individual as they begin a relaxed, stress-free superannuation following years of hard work and dedication.
Although the majority of your experience in a retirement community will be independent, many communities offer additional care for those who need it so they too can make the most of their fixed term annuity.
There are a whole variety of leisurely and lifestyle orientated retirement communities that offer a range of amenities that cater for all different walks of life including golf courses, libraries and social activities that focus on bringing the residents closer.
There a number of communities both abroad and in the UK that can offer you an exceptional standard of care and enjoyment during your retirement that all come at an affordable price in exchange for a wonderful experience during your stay meaning that you have the option of you want your community to be situated.
A retirement community is a great alternative to invest in with your fixed term annuity and enables you to share your superannuation with a loved one or even a meet a loved one to share your retirement experience with in the comfort of your own community grounds.
According to the Daily Mail, as a result of the new gender equality rules, women who wish to purchase a fixed term annuity are now entitled to a higher income compared to last year’s annuity rates due to the 12% increase introduced last December by the EU.
Previously, when looking to purchase an annuity men would typically be offered a higher income insinuating that men have a much shorter life expectancy than women however the new gender equality rules mean that it is illegal for insurance companies to discriminate based on the enquirers gender when proposing to covert their pension pot into fixed annuity income.
Both genders have benefited from the new rules with women witnessing the greatest rise in their potential annuity income. It was found that female smokers are entitled to a massive 15% increase in retirement income along with other acute medical conditions that may affect the life expectancy of the individual and male smokers also witnessed a significant rate increase of 11%.
Bearing this in mind, if you’re approaching your retirement and are unsure of all of your options then now would be the best time to get in touch with a professional advisor and see what’s currently on the market for people with your health and marital status, lifestyle and sized pension pot to ensure you get the best rate.
If you’re looking at purchasing a fixed term annuity or to find out if you’re a suitable candidate for an impaired life annuity, speak to a annuity comparison agency today for support leading up to your retirement and to discover the best pension annuity rates presently on the market.
So, you’ve invested in your uncapped drawdown and just began the stress-free walk in the park that is retirement, but why limit yourself to your town park? Retirement is a fantastic opportunity to see the wonders of the world outside the bubble of your town and with your mortgage paid off and your choice of an uncapped drawdown, you can live and travel comfortably without the worry of overspending.
If you’re struggling for ideas on where to travel during your retirement, here is a list of some of the most popular destinations for recent retirees:
- Kuala Lumpur – If you share a passion for history and culture with your partner, then Kuala Lumpur is the perfect destination. This multicultural location can offer retirees the opportunity to experience a great range of different lifestyles and truly reminisce about the way you have spent your life up until now. It is also home to one of the most incredible landmarks, the Batu caves have been said to help visitors channel their inner peace and provide them with the stress-free mentality they need to have the best retirement. Not only this, there are many luxury hotels offering rooms at a more than reasonable price so you never have to sacrifice comfort during your stay.
Who could deny the concept of lounging in the beating sun or exploring historical towns and meeting mild mannered residents situated around the capitol hasn’t at least passed their mind in the time leading up to their retirement.
- Dubai – Dubai is renowned as one of the most beautiful cities in the world which offers a vast variety of excellent cuisine choices and landmarks that simply transform the cities night life. With the sun on your face, a gorgeous stretch of fine sand beneath your feet and the chance to partake in new experiences you won’t find anywhere else in the world, Dubai truly is one of, if not the, most astonishing and captivating retirement destination in the world.
- Fiji – For many young and old, Fiji is one of the most desired holiday locations on Earth due to its initial location, gorgeous scenery and the chance to island hop as and when you wish to gain a truly intimate experience with your beloved partner. The exotic nature of this particular island makes it worthwhile spending the time to explore it and with the opportunity to visit the rest of the Archipelago islands, you can’t go wrong. Fiji promises a remarkable history, a variety of tropical wildlife and an experience you won’t soon forget.
These are just three of the destinations often visited by recent retirees, how will you get the most out of your uncapped drawdown?
If you’d prefer a more flexible option during your retirement that is not limited by a set annuity rate that will take into consideration your current health and marital status, then an uncapped drawdown could be a suitable alternative.
The great thing about uncapped drawdowns is that you are not limited to how much you can withdraw, meaning that if you want to withdraw your whole fund all in one go then you can. This is a popular option for those who still have a mortgage to pay so they can finally be in peace from the stressfully high bills still lingering over their home.
Due to the fact that there isn’t a limit on how much you can withdraw, it is required that you have an annual guaranteed income of at least £20,000. This is simply because if you do choose to spend your pension fund all in one go, you will potentially be left with nothing in the bank so by setting the uncapped drawdown threshold to a minimum of £20,000 per year it means that you will always be a basic rate tax payer.
However, on the bright side, your annual income can be made up in several ways:
- Pension Annuities
- State Pension
- Scheme Pensions
- Final Salary Pensions
Investing in an uncapped drawdown can be extremely tax efficient as in the past the highest rate of income tax was a staggering 60% and compared to todays 45%. Also, if you plan all of your income withdrawals over a set number of years, then you may end up paying just 20% on some, if not all of your pension fund. For many, this makes uncapped drawdown a desirable approach.
However, uncapped drawdowns are not for everyone. The concept of being able to withdraw money as and when you need it may prove worrying for couples who struggle to manage their money efficiently so they often opt for capped drawdowns so they have an enforced limit to how much of their pension fund they can spend at one time.
For more information about retirement alternatives, get in touch with an annuity comparison agency today to find the UK’s best annuity rates.
Did you know that shopping around when looking for an annuity boots your income by almost a third? Well, you do now.
Failing to shop around through the annuity process could jeopardise you receiving the best annuity rates in the UK. Which? has found that those who shop around for the best annuity rates are more likely to land an extra 20% year on year in their income, sometimes even greater than this.
You could also be choosing the worst annuity rate by opting for the first one you receive so in this case you could be gaining an extra 31% on your retirement income. Annuity rates can differ provider to provider, and you should explore as many as possible in order to get the best quote.
This percentage could also be affected for those that are in ill-health too. For example, someone that has smoked for a long time, say ten years, and has been impaired by lung disease could actually see a huge 47% difference in their retirement income if comparing the worst and the best pension annuity rates and quotes.
Annuity rates, in general, are deemed to be on the up, so these digits could be affected even more, which emphasises the huge need to browse the internet and your options in order to have the best retirement you can.
Do your research and speak to as many people or companies as you can, you never know, you might have missed the company that offers the best rate.