Sustaining Income In Retirment

Question 1

Additional information to generate sustainable income through retirement.

Answer 1

What’s missing?
B
-Interest rate
-Dividend yield
-Pension withdrawal options
A
-Asset allocations
N
-Required income to be sustainable
-Need for guaranteed income
-Need for lump sums
-Current/Future LTC and cost
T
-Death benefit nominee
-Tax position in retirement
-Use of allowances
T
-Retirement age
E
-Fund charges
R
-Does the employer offer matching contributions
-Is salary sacrifice available
-Investment performance
-Capacity for loss
-Fund projections to retirement
R
-State pension forecast
-When will State pension be payable
-Contribution history

Willingness
B
-Willingness to work in retirement
-Willingness to downsize
-Willingness to use Equity release
-Willingness to rent a room

A
-Willingness to rely on other assets
N
-Willingness to leave legacy
T
T
-Willingness to use tax allowances
E
-Willingness to make higher pension contributions
-Willingness to use salary sacrifice
-Willingness to make regular contributions
-Willingness to make lump-sum contributions
-Willingness to continue contributions in retirement
R
-Willingness to take risks
-Willingness to switch investments for performance
-Willingness to switch investments for risk
-Willingness to switch investments for ESG
R

Views/Opinions
B
-Secure or flexible income
A
N
T
T
E
R
-Views on inflation
-Views on ESG
R

Question 2

Factors that should be considered when reviewing financial arrangements to determine sufficient level of income throughout retirement.

Answer 2

B
-current income
-guaranteed sources of income
A
-available assets for income
-growth assuption
N
-income need
-need for guaranteed
-need for flexible
-desire to leave legacy
-protection needs for LTC
T
-life expectancy
-health
T
-current and future tax status
-Use of allowances
E
-current expenditure
-debts
R
-inflation assumptions
-annuity rates
-safe withdrawl rates
R
-state pension

Question 3

Reccomend and justify for sustainable income in retirement

Answer 3

Lifetime cashflow modelling
To detirme the amount required

Make regular pension contributions and ask the employer to match contributions
Only if affordable
Use lump sums from cash
Benefit from tax relief
Maximise growth
Benefit from funds in IHT wrapper

Determine how to take pension benefits
To fit ATR
Meet lump sum requirements
Provide a tax efficient income

Review investments
To ensure sutability and performance
Switch funds if required
Open other investments

Use investments other than pension
To keep funds in a tax-free environment and maintain IHT benefit

Check NIC for state pension purposes
Plug gaps
Maximise a secure source of escalating income in retirement

Establish LPA
To handle decisions in the event that she is unable to herself

Question 4

Retirment planning assumptions

Answer 4

What will/will not happen?
B
-Afordable on going contributions
-Make regular contributions once retired
A
-Execess funds used for investments
-Investments used for funding retirement
N
T
-Use allowances
-Use carry forward
-Tax status will remain the same throughout retirement
T
-Retire state pension age
-Retire before state pension age
E
R
-Remain in good health
R
-Fill NIC gaps if affordable
-Deffer state pension
-Nom8nations will be updated