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01 Oct 2014

Experts Recommend A Mixed Retirement Solution

There are a number of new pension options due to begin next year; but according to an article on Money Facts, retirees should consider adopting a mix of solutions in their retirement plans.

With more choice – and freedom – than ever before, those approaching their retirement will also be under a lot of pressure to make the right choice when it comes to funding their later years. And according to experts, the best way to do this is by taking a “balanced approach”.

Rather than choosing one solution, such as annuity or drawdown, research suggests that incorporating both into your plans can be the most secure way to balance out your desired income with any potential risks involved.

Aviva´s ‘Good Retirement Choices´ report studied the effectiveness of annuities and income drawdown purchased in 1999, 2004 and 2009. It was concluded that neither could have been expected to deliver the best financial outcomes; therefore it is best not to pin everything on one solution.

“People should take advice where possible, and be realistic about how much money they need for the remainder of their lives,” advises Clive Bolton, managing director of retirement solutions at Aviva.

In fact, seeking advice will be more important than ever with the added freedoms due to come into place in 2015. A recent consumer survey showed that independent financial advisors are the most popular place to go for advice (25% of respondents); followed by family and friends (16%) and employers (9%).

Worryingly, one in five people (20%) admitted that they are doing their financial planning themselves. This is not advisable, and could mean that you end up with a smaller retirement income than if you had sought professional advice. With so many options now available, seeking expert advice is essential.

 

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