02 Apr 2012

The Pension Myth

The Pension Myth

What are your retirement options?  Is a pension the most efficient way of planning for your retirement in order to maintain your lifestyle objectives?  

What are your retirement options?  Is a pension the most efficient way of planning for your retirement in order to maintain your lifestyle objectives?  

There is a long held misconception that pensions do not offer good value for money due to long term returns and high charges.  The reality is that for anyone thinking about planning for retirement they do provide a valuable option if set up and managed properly.

The key aspect of retirement planning is diversification and the younger you are when you start thinking about this important stage in life the easier it is to diversify your investment strategy.

With ever increasing longevity young people can, in some cases, expect to live almost as long in retirement as their working lives.  Particularly in the early years of retirement, the majority of people will still be as active as the years before retirement, and, with ever improving health care, there is no reason why this level of activity will not continue until later stages in life as well.  As a result, what income will be in place to support this lifestyle?  Will one be forced to give up what they love doing, due to lack of income?  Does one give up their social life in retirement, due to a lack of funds?  What if you didn’t have to give up anything?

With the tax efficiency available via a pension plan, and the potential of a tax free lump sum at the end of it, there are a more than a few attractions towards pensions.  But retirement planning does not need to be in a pension. There are other ways in which  to save for your future offering flexibility and tax efficiency which provides additional diversification, choice of funds and risk and low costs.

The golden rule of don't put off doing today what you can do tomorrow has never been more important than when you think about your future so as we enter a new tax year it might be an option to actually take the first step on what might be a very long journey.

Grant Morrice, Financial Adviser

Regulated by The Law Society of Scotland.  Authorised and Regulated by the Financial Conduct Authority. 

The Financial Conduct Authority does not regulate tax advice


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