sm130 - Flipbook - Page 4
Retirement
Five questions to ask
yourself before retirement
Are you doing enough today to give yourself the freedom and choices you want tomorrow?
Retirement should be something to look forward to, not a source of
financial anxiety. For many people, retirement can seem comfortably distant
until, suddenly, it is not. Years of working, saving and paying into pensions can
create the sense that everything will somehow fall into place.
The decisions you make can have significant tax
and investment implications. For example, taking
large withdrawals in a single tax year could push
you into a higher Income Tax band, while taking too
much from drawdown could leave you with less
money later in retirement.
5. What if life doesn't go to plan?
A retirement plan based solely on everything going
right can unravel quickly. Investment markets can fall,
inflation can erode spending power and unexpected
costs can arise. You may also live considerably longer
than expected.
Professional financial advice will help you
stress-test your plans against different scenarios
and consider investment risk, tax, longevity and
the most appropriate way to use your assets. Most
importantly, it can help turn a collection of pensions
and investments into a coherent plan for the life
you want. t
T
he reality is that, without a clear plan,
available is essential to building a sustainable
you could reach retirement and realise
income plan.
that the lifestyle you imagined is more
expensive than your savings can support.
The good news is that spotting a potential
Check your State Pension forecast and National
Insurance record, as gaps could affect your eventual
entitlement. Understanding which income you can
shortfall early gives you time to address it. Whether
rely on can also help determine how much you need to
retirement is decades away or approaching quickly,
generate from your private pension and other assets.
asking yourself these five questions could help you
take greater control of your financial future.
3. Am I saving enough?
Seeing a pension balance on a statement can be
1. What does my dream retirement look like?
reassuring, but the figure alone does not tell you
Start with the life you want to lead, not a pension
whether you are on track. What matters is how much
figure. Do you dream of travelling more, spending
income your savings could ultimately provide and
time with family, taking up new hobbies or simply
whether it matches the life you want.
enjoying your days without financial worries?
Think about the costs involved, from essential
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Have you given your
future self more choices?
Retirement is one of the biggest financial
transitions you are likely to face. The decisions
you make today could determine whether
your later years feel financially secure and
liberating, or constrained by money worries.
If you would like to know whether you are
on track for the retirement you want, please
contact us. We can review your pensions,
investments and wider finances, identify any
gaps and help you build a plan tailored to the
future you want to enjoy.
Consider your contributions, investment strategy,
charges and the impact of inflation. If you discover
household bills to holidays, leisure and support for
a potential shortfall while you still have years
loved ones. Your spending may also change over
before retirement, you have more time to increase
time, with higher expenditure in the early years
contributions, review your investments or adjust
before your priorities evolve.
your plans.
2. Where will my income come from?
4. How will I turn savings into income?
Your retirement income may need to come from
Pension freedoms give you choices. You could use
several sources, including workplace and personal
drawdown to take a flexible income while keeping
pensions, the State Pension, savings, investments
your pension invested, buy an annuity to secure a
or property. Knowing when each source becomes
guaranteed income, or combine approaches.
This article does not constitute tax, legal or financial
advice and should not be relied upon as such. For
guidance, seek professional advice. A pension is a longterm investment not normally accessible until age 55 (57
from April 2028, unless the plan has a protected pension
age). The value of your investments (and any income
from them) can go down as well as up, which would
affect the level of pension benefits available. Investments
can fall as well as rise in value, and you may receive back
less than you invest.
