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What is the difference between secure and variable income in the Retirement Planner?

Secure income is provided by using part of your fund to purchase a lifetime annuity from an insurance company. In return for this money the insurance company promise to pay a set income for the rest of your life, which will never run out (and could continue to be paid out after you die depending on the options you choose). The insurance company bears the risk that you live longer than expected and the income needs to be paid for longer than anticipated, but the flip side is that if you die earlier than expected your beneficiaries don’t benefit and the money is used to cross subsidise other policy holders.

The variable income is provided by moving your fund into drawdown in the HL SIPP. You choose where the money is invested and how much to withdraw. Income is not secure, and could even run out, depending on investment performance, how much you have withdrawn and how long you live for.

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