Pension Planning & Advice
Pension Planning
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular instalments, while the latter is paid in one lump sum
The terms retirement plan or superannuation refer to a pension granted upon retirement. Retirement plans may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions. Called retirement plans in the United States, they are commonly known as pension schemes in the United Kingdom and Ireland and superannuation plans or super in Australia and New Zealand. Retirement pensions are typically in the form of a guaranteed life annuity, thus insuring against the risk of longevity.
Annuity Advice
Changing of state retirement age and how it is set to increase
For men, the current State Pension age is 65.
For women, the current State Pension is increasing from 60 to 65 from April 2010. This affects women born on or after 6 April 1950
Proposal to increase State Pension age to 66
The government has published new proposals for increasing the State Pension age to 66.
Women’s State Pension age will increase more quickly to 65 between April 2016 and November 2018.
From December 2018 the State Pension age for both men and women will start to increase to reach 66 by April 2020.
These proposals affect you if you are one of the following:
• a woman born on or between 6 April 1953 and 5 April 1960
• a man born on or between 6 December 1953 and 5 April 1960
These proposed changes are not yet law and still require the approval of Parliament. If you are affected by these proposals, see ‘Proposed changes to State Pension age’ to find out what your State Pension age will be.
• Proposed changes to State Pension age
•
People not affected by these proposed changes
These proposals do not affect you, if you are one of the following:
• a woman born on or before 5 April 1953
• a man born on or before 5 December 1953
• a man or woman born on or after 6 April 1960
The State Pension age calculator will tell you when you will reach State Pension age under the current law.
The current law already provides for the State Pension age to increase to:
• 67 between 2034 and 2036
• 68 between 2044 and 2046
However, the government is considering how the State Pension age should be changed in the future. This may mean the timetable for increases to 67 and 68 will be revised. The government will bring forward proposals in due course. Any change to the timetable would require the approval of Parliament.
General Pension planning
Whether you are a sole proprietor, partnership or a corporation, there are several types of qualified retirement plans that can meet your needs. A retirement plan can serve many purposes, from tax sheltering income to attracting and retaining employees
Qualified Retirement Plans
A qualified plan must meet a certain set of requirements in the Internal Revenue Code such as minimum participation, vesting and funding requirements. In return, the IRS provides significant tax advantages to encourage businesses to establish retirement plans including:
• Employer contributions to the plan are tax deductible.
• Earnings on investments accumulate tax-deferred which allows contributions and earnings to compound at a faster rate.
• Employees are not taxed on the contributions and earnings until they receive the funds.
• Employees may make pretax contributions to certain types of plans.
• Ongoing plan expenses are tax deductible.
In addition, sponsoring a qualified retirement plan has the following advantages:
• Attract experienced employees in a very competitive job market: Retirement plans are fast becoming a key part of the total compensation package.
• Retain and motivate good employees: A retirement plan has the ability to keep employees from moving over to your competitors.
• Help employees save for their future since Social Security retirement benefits alone will be an inadequate source to support a reasonable lifestyle for most retirees.
• Plan assets are protected from creditors.
Employers can choose between two basic types of retirement plans: defined contribution and defined benefit. Both a defined benefit and defined contribution plan may be sponsored to maximize benefits.
Getting advice from highly qualified staff at a local Professional Pension Planners will provide timely and accurate plan administration for local clients in Cardiff. Planning for your retirement can be a difficult task, especially if you don’t know what your options are and if you aren’t sure what you need to be doing in order to pay for your retirement. It’s hard to know how much money you are going to require in order to pay for your future needs. Take a look at your income level know and then try to calculate inflation so you can see what type of amount you will need to life a comfortable lifestyle in the future.
There is no way to know if you will need to go into a rest home or an assisted living centre so you also need to worry about setting aside money for this. How about the cost of paying for health problems that you may face in the future? Will you have money that can pay for those needs?
Many seniors like to have plenty of money set aside to do some travelling and to live healthy and active lifestyles. You need to plan for this with your retirement and you need to do more than just put money into a work retirement account to have money for your future.
One option most employers will provide you with is a pension plan. A pension can help to pay for some of your retirement costs, specifically those that will help you live on a day-to-day basis. Always work out a good pension plan with your employer before you retire and make sure you don’t have debts when you retire because the last thing you want to do is use your pension to pay for your debt. Getting proper advice from a local pension planner is crucial as they offer decently fair pension plans and it offers you a nice income to live off when you retire. Retirement accounts are always valuable to your future. Most employers offer different retirement accounts that will offer you matching compensation for your account so you can make a nice amount of money for your future.
Finding out the amount of tax relief from local pension planners.
Recent changes in pension legislation have significantly reduced the amount of tax relief available for pension contributions. Nonetheless, pension planning continues to be an important tax relief and depending on your circumstances should form part of the future retirement plans for most of us.
However, the recent restrictions to pension relief may make it necessary to consider other tax efficient investments and tax planning opportunities to optimise your overall financial position. As local financial advisors, we would of course be happy to advise you further in this respect.
The pension contribution rules which apply from 6 April 2011 are broadly summarised as follows:
• The annual allowance for pension saving is reduced from £255,000 to £50,000;
• The lifetime allowance will also be reduced from £1.8 million to £1.5 million;
• Contributions within the annual allowance will benefit from tax relief at the taxpayer’s highest marginal rate of tax;
• Unused relief can now be carried forward; the £50,000 annual allowance can be carried forward for up to three tax years. Depending on your circumstances, you may be able to make pension contributions of up to £200,000 in 2011/12.
Our team of advisers can consider how these new rules affect your pension position. We will also seek to ensure you are aware of the following issues and offer advice, which may include:
• The type of pension appropriate to your circumstances, including personal pensions, occupational pensions, self-invested personal pension schemes (SIPPs), qualifying recognised overseas pensions (QROPS) and qualifying non UK pension schemes (QNUPS) and International Pension Plans (IPPs);
• The contribution rules and tax relief’s available to you;
• The tax implications of exceeding contribution and lifetime allowance limits;
• Your options on retirement;
• Your options if you are leaving the UK to retire overseas.
This is information is provided as a general guide only. Due to the constant changing of in legislation and policies you should always seek professional advice from a financial planner in Cardiff
Cardiff Financial Advisor
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular instalments, while the latter is paid in one lump sum
The terms retirement plan or superannuation refer to a pension granted upon retirement. Retirement plans may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions. Called retirement plans in the United States, they are commonly known as pension schemes in the United Kingdom and Ireland and superannuation plans or super in Australia and New Zealand. Retirement pensions are typically in the form of a guaranteed life annuity, thus insuring against the risk of longevity.
Annuity Advice
Changing of state retirement age and how it is set to increase
For men, the current State Pension age is 65.
For women, the current State Pension is increasing from 60 to 65 from April 2010. This affects women born on or after 6 April 1950
Proposal to increase State Pension age to 66
The government has published new proposals for increasing the State Pension age to 66.
Women’s State Pension age will increase more quickly to 65 between April 2016 and November 2018.
From December 2018 the State Pension age for both men and women will start to increase to reach 66 by April 2020.
These proposals affect you if you are one of the following:
• a woman born on or between 6 April 1953 and 5 April 1960
• a man born on or between 6 December 1953 and 5 April 1960
These proposed changes are not yet law and still require the approval of Parliament. If you are affected by these proposals, see ‘Proposed changes to State Pension age’ to find out what your State Pension age will be.
• Proposed changes to State Pension age
•
People not affected by these proposed changes
These proposals do not affect you, if you are one of the following:
• a woman born on or before 5 April 1953
• a man born on or before 5 December 1953
• a man or woman born on or after 6 April 1960
The State Pension age calculator will tell you when you will reach State Pension age under the current law.
The current law already provides for the State Pension age to increase to:
• 67 between 2034 and 2036
• 68 between 2044 and 2046
However, the government is considering how the State Pension age should be changed in the future. This may mean the timetable for increases to 67 and 68 will be revised. The government will bring forward proposals in due course. Any change to the timetable would require the approval of Parliament.
General Pension planning
Whether you are a sole proprietor, partnership or a corporation, there are several types of qualified retirement plans that can meet your needs. A retirement plan can serve many purposes, from tax sheltering income to attracting and retaining employees
Qualified Retirement Plans
A qualified plan must meet a certain set of requirements in the Internal Revenue Code such as minimum participation, vesting and funding requirements. In return, the IRS provides significant tax advantages to encourage businesses to establish retirement plans including:
• Employer contributions to the plan are tax deductible.
• Earnings on investments accumulate tax-deferred which allows contributions and earnings to compound at a faster rate.
• Employees are not taxed on the contributions and earnings until they receive the funds.
• Employees may make pretax contributions to certain types of plans.
• Ongoing plan expenses are tax deductible.
In addition, sponsoring a qualified retirement plan has the following advantages:
• Attract experienced employees in a very competitive job market: Retirement plans are fast becoming a key part of the total compensation package.
• Retain and motivate good employees: A retirement plan has the ability to keep employees from moving over to your competitors.
• Help employees save for their future since Social Security retirement benefits alone will be an inadequate source to support a reasonable lifestyle for most retirees.
• Plan assets are protected from creditors.
Employers can choose between two basic types of retirement plans: defined contribution and defined benefit. Both a defined benefit and defined contribution plan may be sponsored to maximize benefits.
Getting advice from highly qualified staff at a local Professional Pension Planners will provide timely and accurate plan administration for local clients in Cardiff. Planning for your retirement can be a difficult task, especially if you don’t know what your options are and if you aren’t sure what you need to be doing in order to pay for your retirement. It’s hard to know how much money you are going to require in order to pay for your future needs. Take a look at your income level know and then try to calculate inflation so you can see what type of amount you will need to life a comfortable lifestyle in the future.
There is no way to know if you will need to go into a rest home or an assisted living centre so you also need to worry about setting aside money for this. How about the cost of paying for health problems that you may face in the future? Will you have money that can pay for those needs?
Many seniors like to have plenty of money set aside to do some travelling and to live healthy and active lifestyles. You need to plan for this with your retirement and you need to do more than just put money into a work retirement account to have money for your future.
One option most employers will provide you with is a pension plan. A pension can help to pay for some of your retirement costs, specifically those that will help you live on a day-to-day basis. Always work out a good pension plan with your employer before you retire and make sure you don’t have debts when you retire because the last thing you want to do is use your pension to pay for your debt. Getting proper advice from a local pension planner is crucial as they offer decently fair pension plans and it offers you a nice income to live off when you retire. Retirement accounts are always valuable to your future. Most employers offer different retirement accounts that will offer you matching compensation for your account so you can make a nice amount of money for your future.
Finding out the amount of tax relief from local pension planners.
Recent changes in pension legislation have significantly reduced the amount of tax relief available for pension contributions. Nonetheless, pension planning continues to be an important tax relief and depending on your circumstances should form part of the future retirement plans for most of us.
However, the recent restrictions to pension relief may make it necessary to consider other tax efficient investments and tax planning opportunities to optimise your overall financial position. As local financial advisors, we would of course be happy to advise you further in this respect.
The pension contribution rules which apply from 6 April 2011 are broadly summarised as follows:
• The annual allowance for pension saving is reduced from £255,000 to £50,000;
• The lifetime allowance will also be reduced from £1.8 million to £1.5 million;
• Contributions within the annual allowance will benefit from tax relief at the taxpayer’s highest marginal rate of tax;
• Unused relief can now be carried forward; the £50,000 annual allowance can be carried forward for up to three tax years. Depending on your circumstances, you may be able to make pension contributions of up to £200,000 in 2011/12.
Our team of advisers can consider how these new rules affect your pension position. We will also seek to ensure you are aware of the following issues and offer advice, which may include:
• The type of pension appropriate to your circumstances, including personal pensions, occupational pensions, self-invested personal pension schemes (SIPPs), qualifying recognised overseas pensions (QROPS) and qualifying non UK pension schemes (QNUPS) and International Pension Plans (IPPs);
• The contribution rules and tax relief’s available to you;
• The tax implications of exceeding contribution and lifetime allowance limits;
• Your options on retirement;
• Your options if you are leaving the UK to retire overseas.
This is information is provided as a general guide only. Due to the constant changing of in legislation and policies you should always seek professional advice from a financial planner in Cardiff
Cardiff Financial Advisor
