4 - Retirement Solutions - (10/80)

Question 1

Retirement Life Stages - Foundation

Answer 1

20s, little assets or income

Focus = Budgeting, borrowing, saving, set up pension

Question 2

Alternative retirement solutions

Answer 2

Equity release
Selling a business (10% relief on first £1m if owned >2 years)
Inheritance
ISAs
Property
Unitised securities
NS&I products
Alternative asset classes e.g. PE, HF
CIS e.g. UTs, OEICs

Question 3

Pension Transfer Rules (client process)

Answer 3

1. Compare amounts in DB vs if it was in DC
2. Ensure sufficient info on this is available to the client
3. Provide the client copies of all comparisons
4. Make sure client fully understands

Don’t just focus on critical yield (% return needed by DC to match DB income)

Question 4

Post-Retirement Investment Strategies

Answer 4

Annuity is guaranteed; FAD is not
Sequencing risk can hit hard

Phased retirement = still working somewhat
Consider provisions for dependants, long term care and estate planning

Question 5

Retirement Life Stages - Early Accumulation

Answer 5

30s, high spending, high risk

Focus = Mortgage, pensions, investments

Question 6

Retirement Life Stages - Late Accumulation

Answer 6

40s/50s, lower spending, move to lower risk investments

Focus = Boost savings, use allowances

Question 7

Retirement Life Stages - Maintenance/Decumulation

Answer 7

Retirement, full tilt to low risk

Focus = Capital preservation, income, maintaining standards