When you purchase annuities don’t put all your eggs in one basket. You can phase your retirement income by using part of your pension fund initially and the rest of it later. With phased retirement it is possible to phase your retirement in an as many steps as you need.
You may have savings that you can use in the early years of your retirement and will not need such a large income from your annuities. It is very easy to just exchange a part of your pension fund for an annuity giving the amount of income you need at that point. Most pension funds are split into clusters and you can just en cash the amount of clusters needed to provide the income.
Once you are retired you could cash the remaining clusters as and when required. There are also death benefit advantages to doing this as the remaining clusters in the pension fund would be paid tax-free to your estate on death.
Get Annuity Advice
There are many advantages to phased retirement, but it is always wise to seek annuity advice from an independent financial adviser to ensure you do things in the most efficient way.