MGM Advantage highlights retirement calculator issue

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MGM Advantage highlights retirement calculator issue

Tue 3rd May 2011

People must take the time to understand income drawdown, as it can have a significant effect on their retirement savings, an expert from MGM Advantage has noted.

Aston Goodey, sales and marketing director at the firm, suggested drawdown is increasingly unsuitable for many individuals, particularly considering the effects of rising inflation.

He said: "Drawdown becomes less suitable over time, as beyond age 75 the ability to deliver consistent investment returns that will compensate for the absence of mortality cross-subsidy become increasingly unrealistic."

Mr Goodey explained that the worry is that people will "drift" into this type of product without realising it, since it is no longer compulsory to purchase an annuity by the age of 75.

In his opinion, many people do not understand the progressive nature of the risk attached to drawdown.

The MGM Advantage representative recently pointed out that there is an increasing number of consumers on the lookout for alternative saving options as a result of falling annuity rates.

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