Retirement options video transcript
When you reach age 55, you will be able to access your retirement savings, even if you’re still working.
So whenever the time feels right for you, you’ll find three main ways to enjoy the money you’ve saved.
Option one – take it all as cash. You can have all your retirement savings paid in one lump sum; however, if you’re planning to use this money to live on, you’ll need to make sure it lasts for as long as you need it to. You may also be able to take some smaller cash payments, and spread them over a number of years. Either way, you should bear in mind the more cash you take out of your plan, the more you may end up giving to the tax man.
Option two – get flexible access to your savings. If you want more control over the money you’ve saved, you can keep it invested in your plan while you gradually take the income you need. As your money stays invested, it still has time to grow, but there’s a risk if your investments don’t do well or if you live longer than expected. Your savings could run out earlier than you’d like.
Option three – buy a secure income. If you’re worried about your money running out, you can give your savings to an insurance company, and in return, they’ll pay you a guaranteed, regular income for the rest of your life. Before going down this route, you’ll need to be sure it suits your needs, because once things are up and running you won’t be able to change your mind.
You can combine any of your three options, and whatever you decide to do, you can usually take up to a quarter of your retirement savings completely tax free. Of course, there’s no rush to do anything. You can put things off until whenever you’re ready. To find out more about your retirement options, talk to your financial adviser, or visit www.royallondon.com/retirement.
Your options explained
When you come to access your retirement savings, you can choose one or a combination of these options.
Enjoy a guaranteed regular income for the rest of your life.
Take the income you need, when you need it.
Have all your savings paid as a cash lump sum.
How your options compare
|Your options||Secure income||Flexible access||Take cash|
|Can provide a regular income?||Yes||Yes||No|
|Is my income guaranteed for the rest of my life?||Yes||No||No|
|Can I change how much money I receive?||No||Yes||Yes|
|Could my money run out later in retirement?||No||Yes||Yes|
|Can I do something different with my savings in later years?||No||Yes||Yes|
|Can I take some tax-free cash?||Usually up to 25% of your pension pot*||Usually up to 25% of your pension pot*||25% of your pension pot|
|Find out more||Secure income||Flexible access||Take cash|
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