At this time of year, many of us are returning from our summer holidays. I have heard retirement being referred to as “one long holiday”. Of course, one day, you’ll retire from full-time work. But have you ever wondered what type of holidays you will be able to afford when you eventually retire?
The type of holidays you’ll be able to take during retirement will depend on your financial situation at the time. It is not just about the Pensions you have built up; it’s your complete financial situation – for example, whether you have paid off your mortgage and other debts.
Planning for this time of life is essential. It’s not just about making sure you have built up enough funds, it is also about making sure that the savings you have accumulated are taking the right amount of risk.
Can you remember back to 2008? People coming up to retirement age were on the news saying that they had to delay their retirement due to the sudden drop in the value of their Pension. Whether you would be affected or not depended on what your Pension funds were invested in at the time.
We often see new clients who have very little idea about how their Pension funds are invested. Do you know what your funds are invested in? If the market were to suddenly drop, do you know how this would affect your Pension and investments?
Over the last few years the options for taking your Pension benefits have changed considerably. Do you know how you intend to take yours? Your answer will affect the risk profile your Pension should be invested in during the time leading up to you taking the benefits.
If you are coming up to retirement and planning to take your Pension, here are some more questions to ask yourself:
- How much income would you like to have coming in at retirement?
- Is your Pension on target to produce this?
- Where are your funds currently invested?
- How are the funds performing?
- What is your personal risk profile?
- Do your current investments match your risk profile?
- Is that profile appropriate for the way you envisage taking your Pension benefits?
If you are coming up to retirement, give us a call on 020 8655 8488 and we’ll help you find the right answers.
A Pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of Pension benefits available.
Pension income can also be affected by interest rates at the time you take your benefits. The tax implications of Pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.
Allowances, limits and thresholds correct at the time of writing, but are subject to change in the future. Please confirm the current position before taking any action