ADVICE
How
Much is
Enough?
3 STEP S TO BETTER
FIN A N CI A L P LA N N I N G
Focusing on fund values and percentages is pointless unless
you know how much you need to enjoy life free from financial
worry – as explains Christine Fox, financial planner with
retirement planning specialists Joslin Rhodes
J
oslin Rhodes are independent pension
advice and retirement planning
specialists. Often when clients come
to us, they’ve been putting off planning for
the future for years. Usually they’re either
scared of finding out they won’t have enough
money or have tried calculating the figures
themselves and it looked bleak.
But many do have enough, they just don’t
know what enough means for them.
To explain how to calculate the financial
future you actually want, here’s your three-
step guide to better financial planning.
1.
The Usual Suspects – Isn’t it
a simple calculation?
Most people calculate how
much money they’ll need in
retirement by working out how much they
have, how long it needs to last and dividing
one from the other.
After all, most of us know what’s in our
bank, savings and, with a bit of digging, our
pension pots.
So, a calculation might look something
like this; let’s say you’re 55 and think you’ll
live to 80, you’ve around £250,000 and
therefore need £10,000 a year to live on.
Sounds reasonable.
However, all this method does is give you
a limited lifestyle, shoehorning yourself
into a budget that doesn’t account for many
important factors.
2.
Things You Didn’t Consider
– What about inflation?
Every year costs rise, and
outgoings go up. To maintain
the same lifestyle as today you need to factor
this in.
Then there’s whether you want to live the
same life for the next 25 years? For most,
costs are different in their active years to
the later years, holidays abroad become UK
holidays, that golf club membership becomes
pay-to-play.
And finally, what about those big one-offs?
Why have you worked all your life if not to
buy that dream car, take that holiday you’ve
been promising yourself, or finally get the
kitchen sorted?
If you give yourself a fixed sum, you’re not
allowing your life any flexibility and denying
much of what makes it worthwhile.
3.
A Better Way – So, what’s the
alternative?
Start by looking at what
enough money actually looks
like for you.
At Joslin Rhodes we do this using our
unique PlanHappy process, which asks
questions such as – ‘enough money for what?’
For you it might be spending time with the
family, enjoying the garden, or even scuba
diving in Australia.
It’s only when we know what your ideal
lifestyle looks like can we calculate how
you’re going to fund it and answer the
question of whether you have enough.
Essentially, good financial planning’s about
moving money around your timeline, so it’s
in the right place when you need it to get the
lifestyle you want.
By doing things this way, you’re allowing
yourself the flexibility to enjoy the retirement
you want, instead of limiting yourself.
After all, why have you worked all these
years if not to enjoy life?
If you’d like us to help you find out what
your enough is, give us a call at Stockton on
01642 04 4949, Newcastle on 0191 249 4304,
or email [email protected]
Visit joslinrhodes.co.uk to find out more.
Joslin Rhodes is authorised and regulated by the Financial Conduct Authority and holds
the additional permissions to advise on Defined Benefit/Final Salary pensions.
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