No matter where you want your retirement savings to take you, our retirement advisers will help you get there. Absolute offer expert advice, a wide variety of retirement products and whole-of-market research to help you make sure your retirement is financially comfortable.
There are several options available to you when you reach retirement age. If you have accumulated a pension pot during your working years, now is the time to choose what you would like to do with it.
Your Personalised Retirement Plan
Your customised retirement plan automatically reflects market changes and is ready to adjust to the shifts in your lifestyle. Our approach is based on extensive research and backtested to provide you with best retirement strategy possible.
One of the choices before or when you retire is the option to take tax-free cash. This option is often available from age 55, but this can vary depending on when you were born and what pension scheme you are in.
Normally you can select to take up to 25% of your pension fund early completely tax-free. You can use this money as you wish. For example, you could spend it on a holiday, paying off your mortgage or re-investing it to generate future income to supplement your pension.
A tax free lump is also known as a pension commencement lump sum, and this is the term most pension companies use.
A secure income retirement plan will be on centered around an annuity purchase with your pension plans. Our team of experts can utilise your open market option and review best income available from the whole marketplace.
What’s to like about an Annuity purchase?
- Income payments for the rest of your life
- No investment risk
- Can be setup to increase with inflation
- Enhanced rates are available to those in poor health
- Can include a spouse benefit, normally at 50% for their lifetime after your demise
What are the considerations before purchasing an annuity?
- If you die young, you may not receive as much as you paid
- There is not a ‘pot’ of money to pay your beneficiaries on death
- Once it has been started it can’t be changed (you can’t sell the annuity)
- Annuity ‘rates’ are quite low at this time, especially for younger retirees.
A flexible income plan will be primarily made using an Income Drawdown contract, specifically the recently formed Flexi-Access Drawdown products. In 2015, new retirement options were announced which allowed greater flexibility to draw benefits from your pensions.
What’s so good about Flexi-Access Drawdown?
- Higher degree of control and flexibility than with an Annuity
- Annuity purchase can be made in the future (but not vice-versa)
- On death, whatever remains in the pot is passed to your loved ones
- Income amounts can fluctuate as per your needs, including ad-hoc withdrawals
Flexi-Access sounds better than an Annuity, what are the drawbacks?
- Flexi-Access is an invested solution, therefore there’s greater risk than an annuity
- Income withdrawal erodes the capital value of the fund, especially if investment returns are poor and a high level of income is taken, which could result in a lower income than an annuity
- Drawdown plans require regular reviews to ensure sustainable income levels are being made. It’s important to have a financial adviser monitor your plan.