Chapter 10 - Retirement Planning Considerations

Question 1

What is a lifestyle fund?

Answer 1

Retirement fund where the investment mix moves away from equities 5/10 years before retirement into gilts/cash, does not take market timing into account

Question 2

What is a target date fund?

Answer 2

A retirement fund used by NEST, where the fund invests in lower risk assets the closer a member gets to their pre selected retirement date

Question 3

What are the 3 types of NEST retirement date funds?

Answer 3

Foundation: for those who join in their 20’s, 5 years of steady growth
Growth: 30 years in this phase, aims to grow assets quicker than in foundation phase
Consolidation: 10 years before maturity where there is a movement away from risky assets

Question 4

Both SSAS’s and SIPP’s can borrow up to how much?

Answer 4

Up to 50% of their NAV for investment purposes

Question 5

Funds in drawdown can pass to beneficiaries free of IHT if death occurs before…

Answer 5

Before age 75

Question 6

Name 2 benefits of pension recycling…

Answer 6

Increases the source of PCLS
Can improve the death benefit options available to the member

Question 7

Are student halls of accomodation regarded as taxable property?

Answer 7

No

Question 8

For a 35 year old, a lifestyling fund will be suitable if they have:

Answer 8

A medium to high ATR and plan to take an annuity at a specified retirement age

Question 9

SIPP’s can only purchase what type of property?

Answer 9

Commercial Property