Retirement lump sums are not easy to know what to do with
For some people it may be the easiest decision of all. Most will look forward to the day when they get to decide what to do with a lump sum of money.
When you come to draw your pension, whether from work or even a personal pension plan, you are most likely going to have the option of receiving a tax free cash lump sum of money.
Being tax free means that it often makes sense to take the maximum amount, depending on your circumstances and requirements.
However, knowing what to do with the lump sum so that you make best use of the money and not necessarily blow it on a holiday or a car can be difficult.
Investing it wisely, knowing how much to put save, invest and spend are all important decision that should be made with care and attention. Getting some financial advice to help you make the right choices can be an invaluable decision.
As with any financial planning decision it will be important to assess your overall financial position and to work out where best to place this money so that it can benefit your retirement for years to come. Indeed, some people even give up the option of the lump sum in exchange for knowing they will receive a higher income for life. Even though that income will be taxed, not having the lure of spending it all at once can offer a feeling of freedom to some.