In Retirement – Taking it easier
Wednesday 9 March, 2016
In Retirement – Taking it easier
As some of the pension decisions you make now may not be reversed later, it is important you make the right choices and shape your retirement plans to best meet your individual needs and circumstances. Each week leading up to the Budget in March we will be adding pension articles from our brochure – Your Retirement Options - Freedom & Choice: before, at and in retirement to help you make sense of the new pension changes. Simon Prestcote, Financial Adviser, Barnet, North London, reviews what you should consider when you want to slow down?
1. Continue to review your Lonsdale Lifetime Financial Plan to ensure it is fit for purpose and can provide you with enough money to live on for the rest of your life.
When we review your Lifetime Financial Plan, your Financial Adviser will discuss the following with you:
Are you drawing your pension income tax-efficiently?
Do your estate planning instructions take advantage of tax changes?
Can you fund potential care costs?
Who could you nominate to assist you with financial decision-making as you get older?
Is your will and power of attorney up-to-date?
Case Study
Henry – 78 years old – retired bank manager
Defined benefit pension scheme – £60,000 p.a.
Judy – 76 years old – retired nurse Defined benefit pension scheme – £15,000 p.a.
No mortgage on their home.
Savings and investments valued at £500,000. Dependants – two sons aged 46 and 50 (5 grandchildren).
Key Considerations
1. Henry and Judy want to enjoy their retirement and are finding it difficult to find the time to manage their savings and investments, so want to appoint a Financial Adviser.
2. The couple want to check that their will is still relevant and review their power of attorney.
Simon Prestcote, Chartered Wealth Manager, Barnet, North London, said:
‘I recommend that one of their children always attend our meetings to help their parents. As their will has not been updated since their grandchildren were born, the couple should review it. I would also discuss how the couple could start to tax-efficiently pass wealth to their children, and recommend they set up lasting power of attorney. After reviewing their savings and investments and preparing a Lifetime Financial Plan, I would recommend there is an opportunity to take steps to mitigate inheritance tax and simplify the management of their assets. To meet their income requirements and maximise tax allowances, I would recommend moving some assets into a managed portfolio, and set up a trust arrangement to help mitigate potential inheritance tax.’
Conclusion
By simplifying their finances the couple have reduced their paperwork and reduced their annual charges and transaction costs. Producing a Lifetime Financial Plan enabled them to see they had enough income to live off in retirement, and enough capital to cover any potential long-term care costs. This has given them the confidence to start gifting money to their children. Appointing a Financial Adviser and nominating their children to help with their finances and power of attorney has given them peace of mind for the future.
