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Retirement Planning – will you have enough income in retirement?

 

This is a big subject and an important one for those of you that want to have an enjoyable retirement when you have the time to enjoy your retirement you need to have the right resources too.

The shape of retirement is changing, when I started advising the focus was generally on building funds to buy a guaranteed income – an annuity, normally after drawing tax free cash.  If you were lucky you had well-funded company pension provision.  Inevitably you retired on a set date, age 65 for example.

Nowadays retirement is far more flexible.  Sometimes people chose to draw pension benefits early without retiring.  Many people carry on working either full time or part time well after their (normal?) retirement date.  Unfortunately, for many, this is a financial necessity.  For others, they work on for their own reasons.

Why would you work on after your ‘perceived’ normal retirement age?  Some of the benefits could be as follows:

  • To maintain good mental health
  • To maintain good physical health and strength
  • Higher levels of income
  • To build additional assets for retirement
  • A gradual phasing into retirement
  • Better for your long-term relationship (no break up from your spouse or partner)
  • To avoid babysitting or carer duties

Reading this back I might be a little biased.  I have plenty of clients that look forward to retirement and enjoy a full and active retirement.  Some people don’t know how they had time for work!

Ideally when you do retire you will have good levels of assets and pension income to sustain you in the lifestyle that you want.  To get to this position takes years of careful planning.  You need to be focused on building your assets and preparing to be tax efficient in retirement.

How do you do this?  Seek independent financial advice early.  The longer you have to plan generally the more tax efficient and better off you can be in retirement.  Don’t wait until it’s too late – be in a position when you decide when you want to retire!

 

Steve Speed

30/05/2019