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CASH MAY NOT BE KING




DECIDING WHETHER TO WITHDRAW CASH FROM YOUR PENSION POT?

Choosing what to do with your pension is a big decision. If you’ve been saving into a defined contribution pension (sometimes called ‘money purchase’) during your working life, from age 55 (age 57 in 2028) you need to decide what to do with the money you’ve saved towards your pension when you eventually decide to retire.

However, making the wrong decision could cost you heavily in the form of an unwanted tax bill, eventually running out of money in retirement and even a tax credits and benefits overpayment.

So before you do anything, there are things you should consider. Note: this article doesn’t cover pension schemes where the pension you’ll be getting is worked out as a proportion of your pay.

HOW MUCH MONEY DO YOU NEED TO RETIRE?

Before you take any cash out of your pension, you need to calculate how much money you actually need. Do you need a lump sum of cash all at once? If so, what are the tax implications? Or would you be

better off with a regular income stream? Remember that retirement could be 30 to 40 years, or more. As well as what you’ll need to cover everyday living expenses, do you have any specific plans for your retirement, such as regular holidays or enjoying a hobby? Or are you thinking of any big one-off purchases or expenditure, like a

new car or home improvements? Once you know how much money you need, you can start to look at your options.

These are but a few questions, you may have many more and would need to plan and structure the journey your funds will need to take, can I suggest we talk through these in much more detail, as a discussion point might lead to a much better outcome.

Please feel free to drop me a line or call my office..

Kind regards

Nick

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