I intend to gradually retire over the next five years and I want to have the flexibility to increase my income as required.
- Mr Brookes is aged 60, married and in good health.
- Mrs Brookes is aged 57 and in good health.
- Mr Brookes has three personal pension funds with a total fund value of £400,000.
- Mr Brookes has an initial income shortfall requirement of £3,600 net per annum which he wishes to increase over the next five years.
- Mr Brookes intends to retire fully in five years time.
- Mr Brookes has little investment financial knowledge.
- He already has an adequate cash reserve for emergencies
- Consolidate all three pension plans into one phased annuity arrangement.
- Crystallise sufficient “segments” to meet the initial required income shortfall via a combination of tax-free lump sum and annuity purchase.
- Each year identify the income shortfall to be met and again crystallise sufficient segments to achieve the desired level of income.
- Look to encash all remaining segments in five years time when Mr Brookes fully retires.
Benefits from advice given
- Simplification of existing pension arrangements by consolidating existing pension plans into one retirement plan.
- Flexibility to meet the desired retirement income required each year.
- To ensure maximum tax efficiency by electing to only receive what income is necessary.
- Ability to generate additional income in the future as and when required.
- Protect the financial well-being of Mrs Brookes now and in the future.
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This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.