An income drawdown plan is an arrangement that allows you to receive a fixed amount of money on a regular basis from your pension benefits. The payments are derived from investment returns and therefore do not reduce the principal amount of your pension benefits over time.
A drawdown plan is an alternative to buying an annuity and allows a pensioner to leave their pension benefits fully invested while drawing an income on a monthly basis.
Anyone can start their Income Drawdown upon attainment of the retirement age of fifty years.
The fund is licensed and regulated by the Retirement Benefits Authority (RBA).
Features and Benefits:
- Regular Income: The income drawdown gives you a regular income in retirement. The income can be monthly, quarterly or bi-annual.
- Guaranteed Returns: Your plan is not affected by the market conditions down the road.
- Convenience and flexibility: When it comes to choosing how much to withdraw and at what frequency, the decision is completely yours.
- Dignity and confidence in retirement: One is able to meet their monthly upkeep requirements and maintain their preferred lifestyle from a reliable source of passive income.
- If one has attained the age of sixty five years, withdrawals from the income drawdown plan are not subject to income tax as pension income.
- The principal amount invested is paid back in full after the expiry of the contract period, unlike in an annuity where the amount expires with the contract.
- In the event of death, the income drawdown plan benefits may be paid out as a lump sum (and taxed at the applicable rate) or the drawdown may continue to be paid to your beneficiaries until the expiry of the contract period, after which the principal amount shall be paid out to your beneficiaries.