PENSIONS are in the news again and with so many legislation changes over the last few years on private pension provision, it is always useful to have a look over all the options available to you.
Pension and retirement planning now needs a multi-dimensional approach and with many choices available, it can seem daunting and quite often leads people to put planning off for another day.
Unfortunately, a comfortable retirement is not something that happens by itself - it needs careful and active planning.
These days when it comes to retirement planning, we have a lot of choice but as a trade-off, we also have to accumulate more money, in a wider range of assets, in order to be able to take advantage of the benefits such as tax allowances.
So what are the best actions to take when it comes to retirement planning?
Does everyone have to do the same thing?
By no means - although most of us still have the traditional view that a pension fund is the only way to plan for retirement, that does not have to be the case.
There are many actions you can choose to take and your choices should be based on what you want for and from your retirement.
Ideally, planning for your retirement should be viewed and addressed in three clear and distinct stages:
? Accumulation years - the time you spend building up as much capital and asset value as possible, as tax-efficiently as possible
? Decumulation years - which should be the fun part of your retirement! This is the time you spend enjoying life after work and having the money to do it, while keeping the tax liability on your income as low as possible
? Succession planning - when you decide who, apart from the revenue, is the intended beneficiary of your wealth, created through a life's work.
And how you approach these stages of your retirement depends upon a number of factors:
? What you expect your income needs for the future will be
? What you plan to spend your capital on
? What your income tax position is now and what it is likely to be in retirement
? Whether inheritance tax planning is necessary.
Let's take a closer look at some of the options you have for accumulating funds for your retirement.
The tax relief on contributions into pension arrangements is still very attractive but there are other investment options with their plus points and these should be included in the bigger planning picture.
With so many choices, it is always helpful to have a discussion with a good independent financial adviser, who can look at your circumstances and ambitions and help you take the right actions for the right outcome.
? Darren McKeever (dmckeever@wwfp.net) is Northern Ireland adviser of Worldwide Financial Planning, which is authorised and regulated by the Financial Services Authority. If you have a query regarding pensions or other financial advice call him on 028 68632692, email info@wwfp.net or click on www.wwfp.net. Follow us on Twitter: @WorldwideFP.