Key retirement considerations

Timing withdrawals

  • If you withdraw your personal pension savings too early, you are likely to receive lower returns as the funds will have spent less time invested, or had less time to grow.
  • But, it is worth noting that withdrawing funds later does not always guarantee higher returns. 

What are your capital requirements?

  • Some individuals withdraw pension funds, even though they do not “need” to. This can result in the money being kept in a less tax-efficient environment.
  • Withdrawing income on a staggered basis can be extremely tax efficient if done the right way. 

What are your income requirements?

Balancing your income requirements is a crucial part of retirement planning. Things to consider include:

  • Your potential earning power throughout retirement
  • Possible additional income needs, such as for long-term care
  • Income preferences, some people may prefer a lower income if it is more stable 

Working out your income needs is important, so you can aim to adopt the right strategy at the right time. Generating income surplus to your requirements can be inefficient in regards to tax.

Approach and risk

  • It is important to pick the approach that suits your needs and personality.
  • Some savers prefer a more high-risk approach with the potential of making larger gains.
  • Others prefer taking a low-risk approach and are willing to accept a lower income as a result.

You also need to ask yourself some of the following questions:

  • How much money will I need to live comfortably in retirement and for the rest of my life?
  • Could there be factors in the future which could cause my capital needs to change?
  • Will my retirement plans allow me to leave an inheritance or financial legacy?
  • How much money would my partner/spouse need to live comfortably if I die before them?
  • Could inflation affect my retirement savings and, if so, how can I protect against this?

Important information

  • Past performance is not a guide to future performance. Investors may not receive back the full amount originally invested and the value of investments and the income from them may fall as well as rise. Tax treatment depends on individual circumstances and may be subject to change in the future.

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For access to advice from a Private Banking and Advice Manager, you’ll need at least £250,000 in savings, investments and/or personal pensions and/or a sole annual income of at least £250,000.

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