Retirement Planning

At Retirement, the advice needed is essential as the options available are wide and varied. Many of which are irreversible once selected, such as signing up to an annuity.

What Does Retirement Mean to You?

Some people want to put their feet up and relax after a busy or demanding career. For others it is a chance to see the world, spend time with their family, or set up their dream business. Whatever it is that you want from retirement, one thing is very important – to have the retirement you want, you’ll have to plan ahead and take action now to make your dream retirement a reality.

Important Considerations

Retirement is Lasting Longer

We’re living longer and longer, which is, of course, a good thing, and life expectancy will continue to extend as healthcare continues to improve. However, this does mean your retirement fund needs to last longer. You can’t predict how long you’ll live, but a sensible approach is to plan for at least a 20 year retirement.

Health

As you get older your chances of falling seriously ill increase significantly, making the prospect of having to pay for long-term care more and more likely. This type of care can be very expensive, with residential care fees into the tens of thousands of pounds per year.

Inflation

Inflation pushing prices up and reducing the value of your savings can be a big problem for those in retirement, especially if you have a fixed income. The cost of living hits pensioners harder when it increases as they spend a larger proportion of their income on utilities, food, and fuel, all of which are prone to higher levels of inflation.

Protecting Your Family

In the event of a serious illness or early death it is important to ensure your loved ones are protected. It’s better to set up protection before you have retired as their cost significantly increase as you get older.

Drawdown

Drawdown involves leaving your pension fund invested and drawing a regular income (monthly, quarterly, half yearly or annually) from it by cashing in some of those investments.

Flexi Access Drawdown

Flexi Access Drawdown is a flexible product that allows you to take a flexible income whenever you need to, while reinvesting the remaining fund in such a way to allow an ongoing retirement income.

Making the Most of Your Money

Starting to save for your retirement early makes a big difference to your savings in future due to ‘compounding’. This is a simple concept that means when your money is invested you earn interest or income from it. The following year you will earn on the original capital and the interest from the first year, and this continues year on year, creating a snowball effect.

Ensure Your Money Lasts

The nearer your retirement gets the greater your need to preserve the savings you have and make sure they will last for your entire retirement. You may also want to consider what changes should be made to your investments as you approach retirement.

These days retirement lasts a lot longer with extended life expectancies, with this in mind it’s essential your money doesn’t run out. It’s crucial that you make the best investment decisions now so your money keeps up with potentially rising inflation.

Are Your Pension Plans in Place?

Can you answer the following questions:

• Are you’re pension payments enough?
• What income is your pension fund going to bring when you retire?
• At what age will you be able to retire?
• Where is your retirement money invested?

If you can’t answer one or more of these questions then it’s important you speak to an independent financial advisor to work out the answers and a strategy to ensure you’re prepared for a comfortable retirement.