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Retirement income advice
DCB
Posted: 18 August 2013 10:29:10(UTC)
#1

Joined: 11/03/2013(UTC)
Posts: 55

I am 65 next year and am wondering how to structure my income in retirement. Very fortunate in having choices of....:
Pensions ( Modest State & Company)
Rental income ( Start gifting property to Kids?)
Investments account / Cash ( Use or keep?)
SIPP / ISAs (Use or keep?)
I guess it is important to get structure right to minimise Income Tax and IHT.
Can anyone suggest a decent IFA who would weigh-up the situation and advise options via telephone/email for a reasonable fee?
Thanks
Alan Selwood
Posted: 18 August 2013 13:42:06(UTC)
#2

Joined: 17/12/2011(UTC)
Posts: 3,379

Thanks: 735 times
Was thanked: 7200 time(s) in 2183 post(s)
Can't suggest any IFA, but make sure wills are up to date and drawn up by a competent specialist (member of S.T.E.P is best).

Bear in mind that if making gifts for IHT purposes, you must cease to gain any benefit from what is gifted - so don't give away the house while living in it, or hand over ownership of paintings that hang in you own property, etc! Those are not effective gifts for IHT purposes.

Carefully-selected AIM shares held for 2+ years are exempt from IHT, and from 5th August 2013 can be held in an ISA too, thus avoiding CGT if sold during your lifetime at a profit.

Beware of miserly rates on annuities (what's new there?), and unexpectedly large tax bills on certain transactions in pension fund draw-down. If about to take out a pension annuity, shop around for quotes, AND make sure that if you are in ill-health, or smoke, you ask for suitable quote for 'impaired life' - if eligible, you get a higher pension than someone who is fully fit. If you have a spouse or other relevant financial dependent, consider what could later be a financial problem if you only take out a single life annuity from your pension and die first. Think carefully about pension choices - fixed pensions pay more than rising ones, but after a few years of inflation they get eroded badly. Equally, a joint-life pension pays less than a single-life one, but may end up being more 'profitable' if you die first. A pension that is guaranteed for 5 years costs little more than one with no minimum time period of payment, and is usually worth it; a 10-year guarantee costs rather more, but may be worth it for some.

If someone suggests an IFA to you, beware of the person making the suggestion happening to be that IFA looking for business; in any event, any IFA needs to be accessible, either by coming to you from afar, or being close enough for you to travel to if, in later years, you cannot travel far through age or infirmity. Do not use any adviser that makes out that he/she has superior knowledge (usually a bluff!), or who declines to make simple, clear and patient explanations of what you do not understand when you ask. Costs of advisors used to be generally hidden by (concealed) commission values to the adviser. Nowadays, all commissions should be effectively banned and replaced by fees for advice + commission-free investments. You may blanch at the size of the quoted fees. A good adviser is worth it, at least initially, but whether annual follow-ups are strictly necessary will depend on your situation.
Do not expect any adviser to keep on the ball every day on your behalf and contact you when spotting something you need to know - there are not enough hours in the day for this level of treatment, except at vast expense to you. Even 'wealth managers' rarely look at your affairs more than once every 3 or 6 months, unless you ring them up, at which point a hasty scrabble to look at your file on screen is the most probable result!
Make sure that you feel at ease with any adviser - that adviser should be honest and trustworthy, and ostentatious clothing or cars may be a sign that the adviser is more interested in his/her wealth than yours.

So, no named IFA in all that, but I hope the odd nugget of useful information is there.
5 users thanked Alan Selwood for this post.
DCB on 18/08/2013(UTC), Stephen Garsed on 19/08/2013(UTC), Michael Ward on 19/08/2013(UTC), eilidh on 19/08/2013(UTC), Dan Mall on 12/12/2013(UTC)
DCB
Posted: 18 August 2013 20:16:55(UTC)
#3

Joined: 11/03/2013(UTC)
Posts: 55

Good post from AS , thanks.
Have spoken to a few IFAs but generally pretty tedious expect to be paid for poor knowledge.
I think I have a plan but would like to run it past an IFA for confirmation/amendments/comments.
I do NOT want someone who insists on telling me about Units Trusts - I am very happy with Shares , ITs and ETFs.
Still plucking up courage to dip into AIM shares but it will have to come.
Tedora DeLen
Posted: 27 November 2013 07:43:43(UTC)
#4

Joined: 27/11/2013(UTC)
Posts: 1

This is very informative question to senior citizen. I am also senior citizen (67) year old. and I have been living in Wellness Nursing home.

Alan Selwood
Posted: 27 November 2013 14:16:14(UTC)
#5

Joined: 17/12/2011(UTC)
Posts: 3,379

Thanks: 735 times
Was thanked: 7200 time(s) in 2183 post(s)
Sounds like advertising to me! Not on topic for pension advice, anyway.
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