One in eight unsure about retirement
ARE you within 20 years of retirement, on an above average income but don’t know when you’ll be able to give up working?
If the answer is ‘yes’ then you’re not alone. According to a recent survey one in eight people aged 45 to 55 earning over £35,000 a year had no clear plan in place to fund their retirement.
While some people may decide to carry on working to maintain a good mental state and involvement in society, it’s nice to have the choice to do so rather than be forced to because you haven’t reviewed your finances earlier.
The key to avoiding this is being sure of what your foundations are, including understanding what you’re entitled to from the state and then layering your other retirement provisions on top of it.
If that doesn’t provide you with enough to meet your expenses and provide for not just survival but also a little bit of enjoyment in retirement perhaps you need to address what needs to be saved before you stop working.
In reality there are only really three things you can do to improve the situation:
Spend less and save more.
Find a way to get more money. Maybe a better paid job, if it is possible.
Try and get a better investment return on the money you’ve already got.
If these are not possible you may need to adjust your expectations for the future and face the fact that you won’t have enough money to fund the lifestyle you want.
Therefore, the key to good retirement planning is to examine your finances now rather than waiting until later.
So, does that mean you should seek financial advice?
Before you take this step, there are things you can do yourself at a very basic level to assess what you have or what you’re entitled to.
You can get a state pension forecast by filling in a BR19 form (obtainable from www.gov.uk) and you can check if you’ve got any deferred pensions from old employers and take a look at your personal investments.
If when you add these together your retirement doesn’t look like a very attractive proposition then perhaps you need to gain some assistance from a financial adviser to help you examine what you can do to improve things.
The benefits of seeing a financial adviser if you do find yourself in this position are many – clarity, peace of mind, understanding what needs to be done, and what level of saving you need to meet your objectives.
We can also help your money work harder for you over the long run by investing it in a carefully created investment portfolio which matches your attitude to risk.
It’s a lot easier to sleep at night if you’ve got a plan and you know you’re on target to achieve it.
Most financial advisers will offer you a free first meeting (like we do at Faron Partnership) to see if they can help you.
We lay the cards on the table and explain what it will cost for you to receive advice to get you on track and then you’ll be able to make a reasoned judgement as to whether that’s right for you or not.
Don’t be scared or intimidated by taking advice – you don’t have to proceed with anybody’s recommendations, so it’s a case of nothing ventured nothing gained.
Remember, the value of your investments can go down as well as up. Past performance is not a reliable indicator of future outcomes.
Remember, the value of your investments can go down as well as up. Past performance is not a reliable indicator of future outcomes.
Andy lives in Wokingham and has worked as a financial adviser for over 30 years. He is married with three grown-up children. Faron Partnership offers personal financial advice, including retirement, investment and estate planning. Any information or views expressed in this article should only be acted upon within the context of your own circumstances with the help and guidance of a professional financial adviser. Faron Partnership Ltd is an independent financial adviser which is an appointed representative of ValidPath Ltd which is authorised and regulated by the Financial Conduct Authority.