What to consider when you are some way off from retirement?
Tuesday 9 February, 2016
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.
Daniel Stansall, Financial Adviser, Barnet reviews what you should consider when you are some way off retirement?
1. Set up your financial plan early to achieve your financial goals and objectives in retirement.
2. Use the Lonsdale Lifetime Financial Planner to calculate your retirement income.
3. Keep your plan on track by annually reviewing it with your Financial Adviser.
When we set up your Lifetime Financial Plan, your Financial Adviser will discuss the following with you: When do you want to retire?
When you reach your selected retirement date, do you intend to give up work completely or work part-time?
How much income do you need to fund your lifestyle in retirement?
How much savings do you require to generate your required income?
Will your existing savings and investments achieve your financial goals at retirement?
Are you utilising all available tax allowances?
CASE STUDY
Jack – 54 years old – sales manager earning £60,000 p.a. Member of his company’s defined contribution scheme – value £150,000. Defined benefit pension scheme – value – £25,000 from a previous employer.
Anne – 53 years old – teacher earning £35,000 p.a. Contributes to Teaching Final Salary Pension Scheme – value £15,000 p.a. Dependents – two children aged 25 and 26. No mortgage on their home.
Cash savings valued at £50,000.
KEY CONSIDERATIONS
1. Jack and Anne want to travel when they retire. They want to know how long they will have to work and what level of pension income they will have in retirement?
2. Their two children are currently renting. They would like to gift money to them so they can buy their first homes.
Daniel Stansall, Financial Adviser, Barnet, North London, said: ‘I would review Jack and Anne’s current expenditure and consider how much retirement income the couple require as they plan to travel extensively when they retire. I would then review their current savings, investments and pensions and prepare a Lonsdale Lifetime Financial Plan for them. By modelling various scenarios I could show them how saving more into their pensions now and taking advantage of tax-efficient products such as ISAs could have a big impact on their final retirement income. Their Lifetime Financial Plan would also show them when they could afford to retire. I would explain the recent changes to pension regulation so they understood how the new ‘Freedom & Choice in Pensions’ would affect them. Finally I would factor into their plan gifting money to their children to purchase their own homes.
CONCLUSION
By taking financial advice, Jack and Anne have their own Lifetime Financial Plan that could be reviewed annually and adapted for any change in circumstances, so they can remain confident that they will achieve their financial goals in retirement.
Lonsdale Services operate offices in St Albans, Barnet, Harpenden, Leeds, Stafford, and Ware supporting a variety of wealth management and employee benefit clients across the United Kingdom.
Our Financial Advisers are independent and have passed the Chartered Institute of Insurance (RO8) Pensions Update examination, in order to better qualify them to offer you up to date pension advice.
Latest News Next Article Previous Article
