Retirement is a time many of us look forward to, leaving behind the nine-to-five and freeing up more time to do the things we really want to do. Even those who enjoy work and the structure it brings would have to admit that being free to do whatever we please - from spending more time with the family to going on that holiday you've always dreamed of - has a certain attraction to it. To do such things in retirement, however, we need to make sure we have prepared financially for when we are no longer working, and this is where retirement planning comes into play.
It is only normal to want to be comfortable in retirement, to have more than the state provision and to spend the money we've worked so hard to earn. And the good news is that this need not be a pipedream; it is in fact very achievable with the right guidance. The best way to get your planning for retirement off on the right foot is to speak to the experts at Equilibrium, who can help you tailor a bespoke plan designed to meet your targets. Our retirement planning tips below, however, will ensure you're thinking along the right lines as you make the moves today that will benefit you tomorrow.
Choose the pension savings vehicle that suits you
There are many different ways to save for your retirement, and so it is important you are able to choose the right pension savings vehicle or select the arrangements that will allow you to meet your saving objectives. This can be a complicated process, and so speaking to the experts, who will sit down with you and find out more about your current position and future goals, will give you the best idea of how to move forward.
This will likely involve a review of your expenditure, looking at your current outgoings and considering how this might change once you reach retirement age. This will give you a clearer picture of where you are now, where you want to get to and what you need to do to get there.
Consider the effect of inflation
Inflation, and its effect on your savings, is something you should always bear in mind, especially as we cannot be sure what is going to happen years down the line. However, we can think about the difference between the inflation rate and our investment returns, as this could provide you with the real return in excess of inflation. Working this out will give you a better idea of when you will likely be able to retire and how comfortable you will be when this time comes.
Understand the different options available
There are numerous options available to you in retirement, and deciding which to take will likely be dependent on your individual circumstances and attitudes towards risk. However the options are usually split into two categories - having full access and flexibility or providing a regular guaranteed income. For example, if you prefer to vary the income that you take or have access to ad-hoc basis lump sums, you might be suited to a flexible access drawdown or uncrystallised funds pension lump sum arrangement. However, if you prefer to have a regular income stream then a scheme pension or annuity might be more appropriate. The options can be complex therefore it is best to seek professional advice before you chose a particular route to ensure that the option you take is the most appropriate one for you.
Think about your attitude to risk
Retirement may bring with it a change to your investment strategy, especially as you become more reliant on invested capital for your income. An investment portfolio can be a great way to generate more funds - both before and during retirement - and a wealth management company can provide the guidance you need to pull together a portfolio that matches your personality and level of risk. By relying more on your investments in retirement, you may find that your objectives change and your approach needs to be tweaked.
Speak to the experts
Our retirement planning tips are based on our opinion and should not be construed as financial advice. As always when considering investments you should be aware that investments may (will) fall as well as rise.
We would recommend sitting down and discussing your situation with the experts, you can get a clear idea of just what you need to do in order to make sure the retirement you've always dreamed of becomes a reality. At Equilibrium we will help you create a bespoke plan, ticking all the boxes to make sure your financial journey runs smoothly and meets all of the right targets at the right time.
You can read more about how we can help with your retirement planning here. If you would like to discuss your situation today and find out how we can help you better plan for your future, call us on 0808 156 1176 or complete our online enquiry form.