Retirement Planning
Retirement Planning
Transitioning from the work force into retirement can be an exciting, novel and even scary time, but putting a retirement plan in place will help ensure you face this new phase in your life with less uncertainty.
Start thinking early
Thanks to compounding interest, the earlier you can add funds to your pension the better. A bit extra in your 40s is great, but that same amount in your 20s and 30s will make a huge difference to your pension pot. Of course, there are a lot of other demands on your income especially during your 20s and 30s (think: starting a family, buying a house).
Even at this early stage, you should consider things like:
- Should I add to my pension, build up my savings or pay more off my mortgage first?
- How much do I need in retirement?
- How much should I add to my pension?
- How much (if any) tax relief will I get if I contribute to my pension?
When you’re in your 40s you should to be taking a more strategised approach, knowing how much you should be adding to your pension and ensuring you will reach that goal.
These can be tricky questions, but don’t worry! We can discuss the pros and cons of these scenarios and recommend the best course of action.
Pre-retirement
Then in your 50s is the time for the nitty gritty. You should know how big your pension pot needs to be and there are a few factors that come into play here. You need to know how much you will be paying yourself from your pension savings for normal living expenses, whilst considering any one-off events such as downsizing your home, changing your car, helping our loved ones etc. This is the last chance to really boost your retirement income.
There are quite a few variables that go into working out how much pension savings you need. Add the variability of your investment performance over the years and it all gets a bit complicated. The team at TCFP can help you put a retirement plan in place that considers all these aspects, as well as working out the ultimate question: when can you retire?
Beginning of retirement
Congratulations – you’ve graduated from your working life! Now is the time to sit back, relax, and enjoy this next phase in your life. Realise those goals you’ve set: go on that big holiday, buy that luxury car! Whatever they may be! To make this as stress-free and secure as possible, you need to work out what guaranteed income you can generate from your pension pot.
Our advisers will make careful calculations to ensure you your money doesn’t run out, but equally as important it will ensure so you don’t wind up at age 90 with £1m left in the bank!
During retirement
Regular pulse checks are important to ensure the money isn’t being spent too quickly (or too slowly!). Fitting in when you want to make lump sum withdrawals for big purchases will also need to be considered to ensure a steady stream and utilising compounding interest.
Adjustments need to be made to your investment portfolio depending on your spending appetite, and plans need to be laid as to how you want your funds distributed to your loved ones after you’ve gone.
The ‘other things’
Some of these items you can go a fair way on your own, but to really put yourself in the best position to have the retirement you deserve, you need the expertise of a TCFP financial adviser. They can help you with the above, plus other retirement planning matters such as;
- Estate planning
- Inheritance tax planning
- Advising on the pros and cons of your pensions (defined contribution, workplace pensions, personal pensions), then arranging moving/consolidation
- Compare lump sum pension contributions vs a long term standing order
- Changes that occur once you reach state pension age
- And the golden question: at what age can you stop work and enjoy the fun, secure, and comfortable retirement we have helped you design
There is much to do when planning your retirement, but we here at TCFP will be there for you every step of the way. After all, you only get one life and one retirement, why not make it the best it can be?
What our clients say
“I had several pension schemes and other investments and wanted to consolidate them all in one place. Jeremy spent time reviewing my situation and my requirements and advised accordingly. I had several meetings with Jeremy and his team and agreed a financial plan. Jeremy wanted to ensure I was happy with his recommendations before any changes were made to my existing arrangements” – Essex client. (Testimonial from Vouchedfor).
Great financial planning can change your life.
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