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What is Secure Investment?It is all too easy to fall into the trap of believing that a secure investment is one in which the capital value cannot fall. The guarantee of capital stability in a bank or building society is reassuring but it is an illusion. This is because the value of money is not static but changes due to inflation, and income varies as interest returns change from year to year. Currently we are in a period of low inflation and very low interest rates - something that has not been seen for a number of years. WENTWORTH ROSE INDEPENDENT INVESTMENT ADVICEOur aim when advising investors is to exactly match the investments to the person's requirements, taking full account of their existing holdings, tax position and risk tolerance. This will nearly always entail using a number of investments working together. The portfolio will normally consist of both fixed interest and equity-linked products. As independent advisers we search the market to try and find the very best investment in each range. Our role is to continually oversee the investment market so that you can concentrate on living your life - leaving us to worry about changing market conditions. There is a bewildering, large range of investment types available to the private investor - but many are similar in construction. The main division is between: "FIXED INTEREST" AND "EQUITY-LINKED". |
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What's new? Phased Retirement
Phased retirement was introduced to add flexibility to drawing benefits from a personal pension. Basically, it divides your pension fund into one thousand little policies allowing you to draw the combination of tax-free cash and annuity income from each one separately. The concept is to encash (vest) the exact number of plans each year to meet a target income.
As most of the cash released comes from the tax-free cash element of the policy initially there is very little tax liability in the early years. Over the years the annuity element will rise and eventually this will provide the majority of the income.
The main advantages of the system is that it allows you to adjust your income levels at will in the early years and to leave most of the fund invested whilst drawing an income. Annuity purchase is thus delayed and spread over a number of years rather than taking place all at once. The concept is very flexible but the main disadvantage is that most of the tax-free cash is used to provide income and cannot be drawn as a lump sum.
These days phased plans are often combined with income drawdown to give the greatest possible flexibility but the administration of these plans can be complex. At age 75 any remaining funds that have not been vested must then buy their annuity (or tax-free cash.). Phased Retirement -
Frugal & Economic Lifestyle
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Inheritance Tax Planning
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Investment
