6 Of The Best For a Safer Retirement...
1. Understand Your Income Options
One of the big decisions you’ll need to make when you retire is how and when to access your pensions.
There are several options including buying an annuity to create a guaranteed income or taking a more flexible type of income using something called ‘drawdown’.
Even if you have a defined benefit pension (which provides a regular income for the rest of your life), you might have the option to take a lump sum from it but you’d need to accept a lower income.
These decisions can have a lifelong effect and could be a bit overwhelming. Understanding your options in clear and simple terms along with their consequences is VERY important.
2. Using Other Money (Not Just Pensions)
Whilst your pensions might play an important role in creating a retirement income, you might want to consider other money as well. Your income doesn’t HAVE to come from your pensions.
It’s all about keeping tax as low as possible (tax you pay while you’re alive and tax your loved ones might have to pay after you’ve left us).
Looking at your position as a whole and where you might be able to take income from in a tax-efficient way could save you £000s!
3. Will Your Money Last?
Retirement can last decades (we hope!) and it can make managing your finances challenging.
Running out of money is a common fear. A robust financial plan can help you see how the decisions you make at the start of retirement will affect the long-term.
If your financial plan is reviewed regularly, you can see what’s ahead and act. Also, you can react quickly to some of the unexpected stuff life throws at us.
Inflation (especially now!) can be a killer. It needs to be accounted for and you’d be surprised how little it’s considered in people’s minds. Get to know your spending. It can be your best friend!
4. Flexibility
This is another big one.
There might be times when you need more income (or lump sums) than at other times. I’ve a few clients who’ve decided to treat their families to holidays which aren’t cheap!
Knowing your money’s set up so you can access it in as flexible a way as possible (and being able to get hold of it easily and quickly) can bring tremendous peace of mind.
Our income needs change over time. You need to know your money can keep up with these changes.
5. Other Goals?
When you retire, creating a stable income to live the lifestyle you want will usually be a priority but you might have other goals that are important too.
Perhaps you want to help grandchildren on to the property ladder or through university. Or you might want to leave behind a legacy for your loved ones.
These can be factored into your financial plan so you can see if you can afford them and what impact they might have on your own financial security. If it looks good, make it happen!
As someone once said to me, it’s far better to give money with warm hands rather than cold ones!
6. Damage Control
As I’ve said earlier, life’s unpredictable. There might be things that happen in your life (or outside it) that could have a big impact on your financial plan and this can be scary.
A robust financial plan can help you navigate your way through things. The world is an uncertain place so stress-testing your future plans regularly will bring comfort.
Don’t get me wrong, a financial plan isn’t a guarantee of anything but it does act as a sort of sat-nav for the journey ahead. When the sat-nav says there’s traffic ahead, we normal do something to react. Make sense?
And That’s It!
Like I said, none of what I’ve just said it particularly complicated but, put it all together and it can make quite a difference.
But it can also be a bit daunting. Luckily, that’s one of the reasons why I’m here (along with my great dress-sense and personality!). I like to translate the complex into simple and you can rely on me to tell you how it is!
Hope you enjoyed reading this and I’m here if you have any thoughts.
See you soon!...