IN THE BACK
Back to basics
Here ’ s the thing . You , me and almost everybody else is mandated to build a pot of money for retirement , but before we get to that point , real life will conspire to derail our carefully made plans . Redundancy , high inflation , poor investment returns and ill health can all disrupt a well-crafted retirement strategy . In the UK , the investment industry has worked hard at creating ever more sophisticated methods of getting you to put your money away , but pretty much leaves you to your own devices when it comes to taking it out again to fund your retirement . Although annuities don ’ t offer anything like the value of a drawdown strategy , at least they provide clarity and security . You pay your money and get an income for life . Simple . Additionally , there is little help or assistance at hand if you hit a problem , which is why the services of financial advisers are in such high demand these days .
Up in the air And here we are at the end of 2022 , with one challenging year behind us and another tricky one ahead . Many people expecting to work until a defined retirement date have found their company has put them out to pasture early , meaning a noticeable proportion of the professional population is facing up to later life in a bit of a quandary . Although an early retirement sounds appealing , the grim reality is that most pension plans rely on us paying contributions right up until the last possible moment . Retiring before you ’ d planned and withdrawing money early can mean your pension pot runs out five to 10 years before you expected . Worse still , you could be forced into a lifestyle downgrade – the Dacia rather than the Mercedes and Torremolinos rather than Barbados .
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