Retirement Planning: Schedule regular tax-free withdrawals - with or without deferral of taxable income

Under the new 'Flexi-Access Drawdown (FAD)' rules, there are many options available for individuals wishing to draw an 'income' from their pension benefits. This guide is intended specifically for modelling a tax-free income, with the option of deferring (perhaps indefinitely) any taxable income until some later time. With this in mind, one could:

 - Take the entire 25% tax-free lump sum, via a single, one-off crystallisation of benefits. The remaining (taxable) benefits, in Flexi-Access Drawdown, can then be used as needed, or preserved, for one's beneficiaries, as detailed here >>>

Or...

 - Choose a strategy of 'partial pension encashment', crystallising what is necessary to provide a tax-free income, year on year, for as long as possible, with the option of deferring any taxable income, as appropriate.

It is the latter of these two options that is now detailed, below:

  • Set-up a regular tax-free income

If wishing to take a regular tax-free 'income' from un-crystallised benefits, held in a Money Purchase account, it will be important to consider your specific requirements and priorities, given that multiple options options, as suggested below:

- Receive a pre-determined monetary figure (of tax-free cash), year-on-year, either level or increasing with inflation. This is easy, as outlined below:

- Receive a pre-determined amount (of tax-free cash), but one that varies, dependent upon the individual's particular income requirement, year-on-year. This is difficult, because there is no automatic function that will achieve this - contact Voyant Support for further guidance.

- Receive a finite monetary amount (of tax-free cash), by 'phasing' the crystallisation of benefits over a pre-determined timeframe. This is easy, as outlined here >>>

To schedule a pre-determined tax-free income, year-on-year - either level or increasing with inflation - one should navigate to the Planned Withdrawals screen, via the left-hand menu. The relevant settings are illustrated below, in 3 easy steps:

1. Select the uncrystallised Money Purchase account, via the Planned Withdrawals screen

Planned_Withdrawals1.jpg

2. Specify the desired amount, and type of withdrawal

Planned_Withdrawals2.jpg

3. Select a 'Start', and 'End' event, for when the income will commence (and terminate)

In the small Time panel, right of screen centre, we recommend selecting the 'Events' tab, after which you will designate a 'start' event (green dot), and an 'end' event (red dot), to designate the period over which the income should be paid (given sufficient funds).

Planned_Withdrawals3.jpg

 

 

NB: To receive a finite monetary amount (of tax-free cash), by 'phasing' the crystallisation of benefits over a pre-ordained timeframe, one would set the Crystallised Amount to '100%'. Frequency will be set to 'Phase Over x Years', with the choice of an appropriate period of time. A short guide is linked to here >>>

To return to 'Retirement Planning Options - Default Settings' click here <<<

 

Last updated 03 June 2018, Release 5.0.24