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PREPARING FOR RETIREMENT – THE KEY CONSIDERATIONS
by Sam Hulson of First Equitable
Have you ever given thought to what you need to consider as you approach retirement ? Whatever your concept of what is a good pension pot , one certainty is that relying on the State Pension alone , will surely not provide enough to live comfortably throughout your retirement years .
• How much money do I need to retire when I want ?
• Am I on track to meet my goals ?
• Am I likely to run out of money ?
• What do I need to do to secure the type of retirement I want ?
In the absence of professional advice , these may be difficult questions to answer and emphasise why it is especially important to start reviewing your finances sooner rather than later .
If you are hoping to retire in the next 5 or 10 years , consider taking these steps now to help ensure you are on track to enjoy the type of retirement you are aiming for . Taking early action can allow you to make any necessary tweaks and alterations you may need to make ; or highlight any shortfalls and how you might be able to address them .
TRACK DOWN YOUR PENSIONS
A starting point is to track down all the different pension schemes you have previously paid into . If you have worked for multiple employers over the years , you may have several pension pots towards the end of your career . If you are unsure where to start the UK government offers a pension tracking service to help locate lost pensions .
OBTAIN A CURRENT STATEMENT
Regardless of the type of pension – whether this is a final salary or defined contribution - your provider should always produce an annual statement for you . This should confirm what the pension is currently worth and a projection at your retirement date .
HOW IS THE PENSION INVESTED ?
Although a pension is a long-term investment , it is still important to regularly review where and how the money is being invested . As well as monitoring how the funds are performing , this also allows you to check you ’ re comfortable with the risk you are taking . It is also a good idea to keep an eye on how much you ’ re being charged , as fees can vary enormously - and it is important to ensure you are getting value for money .
SEEK INVESTMENT ADVICE
Whether you are close to retiring or still a number of years away , obtaining professional investment advice can make a huge different to your investment outcomes . A professional will be able to provide objective analysis as to how your investments are performing relative to the risk you are taking and the market as a whole . Does your portfolio have the right level of risk and diversification for your objectives ? This not only applies to pensions but also any other savings and investments you may hold .
HOW DO YOU PLAN TO ACCESS YOUR PENSION ?
This will obviously depend on the type of pension ( s ) you hold . If it is a defined benefit plan , such as a final salary pension , the options may be limited to that of what age you retire and whether ( or the extent ) you exchange any pension for tax-free cash or not . If it is a defined contribution plan ( also known as money purchase ) then flexible access drawdown now provides a wide range of options to access the money instead of buying an annuity . Will you take a lump sum , a regular income – or perhaps a combination of the two ? If you have multiple plans you might want to seek advice as to the most tax efficient way you could draw from the pensions .
THE BENEFIT OF PROFESSIONAL ADVICE
Professional financial advice can help you make the right decision about your pensions , savings and investments - and ultimately your future . Pension products can often be complicated to the untrained eye and of course life itself can be unpredictable . Retirement planning can play a crucial role in ensuring you are on course to meet your objectives ; or if not , what action you need to take now in order to give yourself the best chance of meeting those objectives .
LET US HELP
It is never to soon or too late to seek professional help . Whatever your situation and however you wish to enjoy your retirement , we can help ensure your arrangements are right for your needs .
To discuss your plans or if you would like further information , please contact us for a free initial , and no obligation consultation . You can also email me at sam . hulson @ first-equitable . com
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