Andrew Leppard reminds us why we should start preparing for our later years and how to kick start our retirement plans.
‘It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so’ (Mark Twain)
It may feel like a long way off, but retirement is something we all face at some point in our future. Yet, for many of us, the total extent of our retirement planning is little more than a folder or drawer containing a few old pension statements.
I asked the following questions during a couple of recent MNC virtual networking events:
‘Do you know when you are going to retire AND how much money (or income) you’re going to have?’
To my amazement only a couple of people in each group raised a hand.
Once upon a time, retirements were short, perhaps only a few years, which made planning for them simpler and ultimately less important. We now live in a world where you could retire at 60 and live to 100 – that’s 40 years. In fact, it could be longer than the entirety of your whole working life!
A retirement is so much more than simply the ‘bit at the end’ ~ Retirement is going to be the longest holiday you’ve ever been on!
As people we love to research, plan, save and put positive energy into ensuring our holidays are extra special and your retirement should be no different.
The more you plan and save now, the more freedom and choices you and your loved ones will have to benefit from during your eventual retirement.
How to start your retirement planning
Firstly, don’t worry if you feel you’ve neglected your retirement planning or have never spoken to an adviser; that’s OK; you’re not in trouble nor is this a test of your financial knowledge.
As a starting point, I would suggest really considering how you would actually like to spend your retirement. What sort of lifestyle would be your ‘future perfect’ and what is the rough cost on an annual basis to achieve it?
Are you prepared to compromise on your lifestyle or like Churchill in WW2, insist the Fortnum and Mason hampers keep on arriving and the Pol Roger Champagne keeps on flowing?
Chartering yachts off the Amalfi Coast in Italy for 3 months a year is going to cost more than a caravan holiday in North Wales eating fish & chips; therefore, defining what is important to you and managing your own retirement expectations is super important.
Consider, when is the right time to retire?
Give some consideration as to how and when you want to retire. (‘Today!’ shouts everyone).
Do you intend to simply stop working or retire gradually over a period of time? Private Pensions can be accessed from age 55, under current legislation, but the good old State Pension is not available until age 66 / 67.
It’s worth noting the full State Pension, for those with a full National Insurance contribution history, is currently £175.20 Per Week… At least that’s my wine budget covered!
How are you doing to fund your pension?
The next thing to do is locate and dust off that folder (or drawer) containing your pension information in order to answer a few questions:
- Are you funding a pension currently?
- Do you have various pensions left over from previous employers?
- Do you even know what your pension is invested in or how much risk you are taking with it?
- Are you aware of the amount of money or level of income your current arrangements will provide in your retirement?
- Do you have other savings and investments, for example, ISAs, that could help towards meeting your retirement goals?
Reviewing your circumstances will enable you to better understand if your current plans are going to meet your needs in retirement or if action is required to help you achieve the ideal lifestyle in retirement.
What are the next steps for planning your retirement?
You may be thinking, “Well that’s great, but what actually happens when I retire?”
The good news is, you’ve got lots of options.
The bad news is I’m saving that topic for a future blog. But if you can’t wait until then please get in touch so we can start to take a look at your circumstances now.
To receive a complimentary guide covering Retirement Planning contact Portsdown Wealth Management on 023 9298 8840 or email [email protected].
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
Portsdown Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority)