Retirement Plannjng

Question 1

Factors to consider - annuity v flexi-access drawdown (8)

Answer 1

• annuity may provide more income over a lifetime then a FAD
• annuity rates could be enhanced due to poor health
• income from annuity is guaranteed for life
• match clients CFL?
• FAD funds could run out
• no investment risk with annuity
• annuity provides not flexibility in income or access to capital
• FAD to manage IT payable by only accessing money needed
• if money not spent then value of estate is increased
• FAD has potential for capital growth
• if not inflation linked then no protection /inflation proofing
• FAD allows PCLS to be used to provide income