Over 50's Guide ? How does corporate finance affect retiree investors

Posted on July 13, 2012 by admin

Restrictive pensions are something that retirees or people looking to retire in the future are slowly moving away from. If you do not want to be restricted to a set amount of money each month or each year of your retirement then you might consider doing something a little less traditional and investing your money. If you know someone with a good corporate finance account knowledge then they should be able to point you in the right direction, however, if you don?t then consider talking to a corporate finance advisor.

A good pension should be a staple part of any retirees income however if you are looking for something a little different to bring you some additional income then consider a number of other options. While nobody is going to agree on the same path for their pension everybody should be saving as much money as possible for the future and there are a number of ways to increase your initial investment.

Initially pension schemes do look quite attractive and with a tax relief on contributions a pension is one of just a few ways in which a saver can shelter income from tax. Also, a pension can guarantee a level of income that can be index-linked and can also be left to your spouse should you pass away unexpectedly. SIPP (self invested personal pensions) mean investors are no longer restricted to a handful of pensions with poorly performing insurance-based funds and these SIPPs can bring down the price of the entire pensions markets.

With Alistair Darling announcing in 2010 that high earners would receive a reduced tax relief this meant a decrease in the long term pension size for thousands of savers. This means that is the government can cut tax relief for one class of pension savers it can cut it for another. The government is constantly looking for new ways to save money and potentially in the future they will look at pension savings again but for the lower earners too.
If you are looking for an option other than a pension then consider an ISA. You can get a reasonable tax free amount per year, in excess of ?6,000 now, and you can make payments and pay no tax on the benefits and interest. This means that you can save a nice lump sum each year, get an increase of tax on it each year, and save for the future. This makes an ISA ideal for those who feel that they will be able to save a lump sum in the future that would usually be liable for income tax, you can continue to save each year and generally the tax breaks has increased each year for the past several.

If you are looking for a guaranteed steady income then consider a pension and try to save the maximum that you can, however, if you are looking for a tax free lump sum for your future without the need for a pension then look at saving your money, or some of it, each year in an ISA.

Source: http://50-plus.org.uk/how-does-corporate-finance-affect-retiree-investors/

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