We are shining the spotlight on withdrawals in our December release. Voyant has made scheduling future withdrawals from Investments, Pensions and Savings even easier in Adviser.
And along with the recent additions of Steps and Transfers, we’ve also added Planned Withdrawals to AdviserGo together with Withdrawal Limits. Read on for a play-by-play of the changes.
Withdrawals Spotlight
BEFORE: “Planned Withdrawals” have until now been a convenient but hidden feature under Advanced Settings. For Money Purchases / Defined Contribution Pensions, planned Withdrawals were mixed in with crystallisation instructions.
NOW: We are now bringing withdrawals front and center, where they will be managed from one easy to access screen called “Planned Withdrawals”. You will find Planned Withdrawals as a new option in Voyant Adviser’s navigation.
BEFORE: To schedule withdrawals, you needed to select individual accounts on the Pensions, Investments or Savings screens, and then drill down into the advanced settings.
NOW: All future withdrawals are scheduled from one central location - the new Planned Withdrawals screen. Think of the Planned Withdrawals screen as your withdrawals overview. On it you can add and manage all your client’s planned future withdrawals and all scheduled withdrawals are conveniently listed on the screen's ledger.
Withdrawals are now also listed on the General Overview but are omitted from the overview’s printable report.
Wondering about withdrawals you’ve already created?
Any withdrawals you have set up in the past will be transferred seamlessly from the Investments, Savings, and Pensions screens over to the new Planned Withdrawals screen where they can be viewed and managed in one convenient location.
New Drawdown Options for UK Pensions
BEFORE: To schedule an income from a Money Purchase pension in our UK release, users had the option to either specify an amount to be withdrawn annually or withdrawals could be taken as needed, not both.
NOW: Users can both schedule a specific income to be withdrawn annually from a pension, and Voyant will withdraw monies as needed.
NEW: The Planned Withdrawals screen also includes some flexible new options, making it even easier schedule future withdrawals according to your clients' needs.
For UK pensions, in addition to UFPLS, the software's default drawdown option from money purchases, you will now be able to model Flexible Access Drawdown (FAD) to show clients taking income from their tax-free cash allowance first.
New “Each” and “Total” Options for Withdrawals from Multiple Accounts
Each - The new withdrawal from “Each” option can be used to schedule withdrawals from multiple accounts, all managed in a single entry.
Example: A couple could schedule withdrawals of their annual allowance £12,500 per annum from both his pension and hers, thereby utilising each person’s annual allowance. Both withdrawals can be managed in a single entry on the Planned Withdrawals screen.
Total - The new “Total” Withdrawal option can be used to effectively set an account-by-account liquidation schedule.
Example: If your client has a retirement lifestyle goal of £50,000 per annum, you could set total withdrawals in this amount (with or without inflation) to be taken from assets in an order chosen on the Planned Withdrawals screen.
Choose the accounts in the order you want them liquidated. Adviser will take withdrawals from one account before moving on to the next in the list. Any gap in needed income will continue be filled automatically based on the default Liquidation Order.
Take the Maximum Annual Allowance from Onshore and Offshore Bonds (UK)
Withdrawals from bonds (life funds) can also be set to take the maximum allowable annually without taxes (i.e. the tax deferred allowance of 5% per annum of original principal).
One-off Withdrawals and Steps, Increase or Decrease Future Withdrawals
BEFORE: You needed to step plan withdrawals up and then down again to take more money than usual from an account in a single year.
NOW: One-off withdrawals can be scheduled in addition to regular withdrawals.
To schedule a one-off withdrawal, simply leave a single start event (green dot) selected on the Planned Withdrawal screen's Time panel.
BEFORE: The only way to end withdrawals at a specific time prior to the end of the plan or the account owner’s death was to step them down to zero at a given event.
NOW: Events can now be used to easily set withdrawals to begin and end within a discreet time span.
BEFORE: Making future changes (steps) in planned withdrawals was cumbersome. Steps were set at the individual account level and steps in withdrawals were buried in a sub-panel that most users missed.
NOW: Future adjustments to a withdrawal schedule are easily managed using the Planned Withdrawals screen’s Step Up / Step Down feature.
Example: Planned withdrawals from a drawdown pension or a money purchase (or an ARF/AMRF in Ireland) could be reduced (stepped down) at your client’s state pension age.
Withdrawal Limits
Withdrawal limits, which give you the option to ringfence accounts in their entirety or limit the ability to liquidate assets on an as needed basis, will continue to work as before.
BEFORE: Withdrawal limits (liquidation limits) and planned withdrawals were all managed from the same panel, which many users found confusing.
NOW: Withdrawal limits continue to be set where needed at the account level whereas future withdrawals are now scheduled on the new Planned Withdrawals screen.
Please Note: Any withdrawal limits (ringfencing) that you set on an account will override any planned withdrawals set on the Planned Withdrawals screen.
NEW: A “Scheduled Only” option has been added to Withdrawal Limit panel that will allow you to limit withdrawals only to those set on the Planned Withdrawals screen.
Example: This option could be used when needed to allow the software only to make the withdrawals you’ve scheduled. Additional funds will not be taken as needed from the account. Generally, the “As Needed” option is recommended, but this new restriction gives you the option to have greater control over the cash flow.
Voyant will continue to take withdrawals as needed from liquid assets whenever your client’s incomes fail to meet their annual expenditures, based on the Liquidation Order, as set in Plan Preferences.
The Takeaway
Don’t worry. If you weren’t setting withdrawals before, you do not need to start setting them up now. The software will still fulfil expenses automatically. However, if you want to take a more hands-on approach to setting your clients’ future income strategy, the new Planned Withdrawals screen is a powerful tool to help you do so.
Want to learn more about the new Planned Withdrawals screen? Read on.
Related Topics
About the Planned Withdrawals screen (how to schedule planned withdrawals)
Scheduling planned withdrawals from pensions
Surplus Withdrawals - What happens to the surplus if I withdraw more than my client needs?
Withdrawal Limits – Placing restrictions on the software’s ability to liquidate assets as needed
Crystallisation Instructions for Money Purchases (UK)
Withdrawal Limits on Money Purchases and Drawdown Pensions