Planning Your Retirement

“My husband and I are both in our late fifties and are higher-rate taxpayers. We were both furloughed for a year, but now we are working from home. This pandemic has made us think about our future and our current retirement plans. My pension is now worth around £300,000, we have a few ISAs, and an investment portfolio worth about £100,000. With this in mind, we would like to organise our retirement plan in a little more detail; what would you advise?”

Carl Responds:

COVID-19 seriously impacted the value of investments; however, the markets have somewhat recovered.  When it comes to planning your retirement, you may need to consider how much income you will need for your desired lifestyle. Checking your recent pension statements will give you an indication of how much you will likely receive. You may also need to track your expenditure before you retire – this will allow you to plan long-term. Looking at your long-term goals will enable you to figure out if you need to save any extra money or if you need to change your retirement age.

Choosing what to do with your pension and investments is a big decision to make, but you do not have to make the decision alone. The best thing to do is to speak to a financial adviser so that you can work together to create a financial plan. You and your financial planner can review your plan regularly to ensure that you are on track to achieve your goals. Seeing a financial planner will enable you to evaluate all available options. In addition to planning your retirement, you will also have the opportunity to create short-term goals that you want to achieve in the next few years. These goals could include buying a new car, going on holiday, or even moving house.

The focus of our analysis would be you and your needs.  To ensure that you are getting the most out of your pension, and investment savings, it is important for us to understand what you are looking to achieve in retirement and to build a plan accordingly.  This means analysing your current and future income, other savings and investments, your family circumstances, and your general expectations for retirement.

Any opinions expressed in this article do not constitute advice.  The value of an investment and the income from it could go down as well as up.  The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.  A pension is a long-term investment, and your eventual income may depend on the size of the fund at retirement, future interest rates, and tax legislation.