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Can you cash in a plan before your retirement?
accumulation of fund. However, there are certain rules owners must follow and this affects
whether you are planning your retirement or not. Yes, it is possible; however, there are
factors that affect your rights to cash it in like your age, the circumstances, and the
method in which the income is drawn.
As a general rule, you have to be at least 55 to cash in your benefit, but you cannot
get the money in full.
Am I able to cash in my amount before I reach 55?
Let's say holidays are coming, but your 55th birthday is at the end of December (Christmas
season). Is it possible to cash in my life funds even if I'm 54 besides I'll turn 55
this year and I don't have the income I require at this moment. As a general rule, it is not
possible but only with the exception if you have to retire because of a serious illness
not for financial reasons such as a holiday or shopping trip! However, there are certain
defined schemes that will allow it like if you are an athlete, or a military personnel.
Check your plans Terms and Conditions for additional help.
But there are companies that promise to get my benefit even if I'm not 55. These companies
do not claim that they can get your pot even before you are 55. What they do is to let
you transfer to another company and enjoy a bonus for making the advance.
If you still decide to cash in before retirement, the government will charge you 55% in the
value of your loan for taxes, and you will have to pay back for the loan.
When Can I cash In My Contributions?
You can take your contribution when you turn 55. You can choose up to 25% of your entire
workplace retirement plan tax-free, or even more depending on how the scheme is defined.
You can normally use the payment for any other means like expensive dinners, fancy events,
buying an annuity, home decorations, a new car or even a holiday on a far away beach.
It is possible to cash in early, but you will be penalized for doing so with expenses. To
reduce these always consult a proper adviser, do online research and include all the things
you would like to have as a retiree. There are also certain types, which will restrict
the amount of debt due. Guaranteed Minimum deductions are often taken in consideration
if you go down this line.
How Much Should I Put In To The Account?
The answer is easy, if you want to have a lot of funds when you retire, for gifts or
for your kids, save a little more money in your pensions. Exact numbers will vary and
it depends on different conditions but a rule of thumb is to put half of your age as a percentage
of your gross salary to allow time for the earnings to grow. For example, if you start
saving at 30, put 15% of your gross salary in your pension and you will be happy.