Retirement Planning

Retirement planning is both an art and a science.

Your retirement planning advice should always start from a position of accurate knowledge. Good retirement planning starts with the truth!

Also, you need to consider retirement planning in terms of three life stages: pre-retirement savings, at retirement advice and post retirement planning. In other words, saving for retirement, making sure that you optimise your retirement benefits at the point of retirement and then finally how you want things to pan out during retirement up to the time that you pop your clogs – so to speak.

Pre-retirement phase

We provide a retirement planning process for our clients that begins with The Clarity Builder™, which is about both you and your Chartered Financial Planner becoming very clear about your aspirations for the rest of your life and your existing arrangements.

Many people who initially approach us for advice are unclear about what they already have saved and what it is that they want to achieve. We write off to your existing providers and have a really good ‘look under the bonnet’; and we have a conversation with you to make sure that we really understand what it is that you want to achieve and by when.

The next stage is The Gap Analysis™ where we project forwards your existing arrangements to see where you will end up assuming no changes to your retirement planning are made. This is then set alongside your retirement goals to establish whether there is a gap and if so, to quantify the gap.

It might seem obvious to be this analytical but you would be amazed how many people do not take professional retirement planning advice and end up missing significant opportunities in consequence.

The Implementation Planner™ then enables you to implement your retirement planning advice in the most cost effective and tax efficient manner.

Very few people are able to take action at outset that will completely close a gap in one fell swoop. So, the most valuable part of the retirement planning process is The Planning Review Programme™.

It is vitally important that your plan is reviewed at least annually to take account of any changes to your circumstances, the economy and legislation. It is also a time to reflect upon your own attitude to risk and your personal goals and aspirations. By continually and regularly reviewing and modifying the plan, your chances of reaching your retirement goals are dramatically increased.

At retirement planning

It astonishes us with the number of people with money saved in their pensions that either do not take independent advice, or worse still no advice at all, at the point at which they wish to retire.

Most people still buy annuities with their accumulated pension funds from the insurance company with which they hold their pension plan; and they give up the opportunity of increasing their lifetime income in retirement by not using the open market option.

This allows you to purchase your annuity from any provider in the market-place. There are £millions wasted each year simply because retiring people do not seek independent annuity advice from a Chartered Financial Planner!

Annuity advice has also become much more flexible in modern times. It is a once in a lifetime purchase; and if you get it wrong, you will pay for the rest of your life with a lower income than you could have enjoyed if you had taken professional annuity advice.

The area of annuity advice has also become more sophisticated over the years; and now includes fixed annuities, enhanced annuities and investment linked annuities. Consequently, it has become a specialist area – so make sure that you seek annuity advice from a Chartered Financial Planner.

For those with larger retirement savings and a greater appetite for risk, consideration should be given to the alternatives to purchasing an annuity. These include ‘capped drawdown’ and ‘flexible drawdown’.

And of course since the 6th April 2015, when pension freedoms were introduced, individuals now have even greater flexibility as to how they secure an income in retirement. Retirees now have the opportunity to draw the full value out of their pension pots and greater death benefit flexibility now allows value to fall to future generations potentially tax-free. We would of course recommend that you seek suitably qualified advice.

Post retirement planning

Particularly for those people who have chosen not to purchase an annuity, ongoing advice and review is vitally important. Your circumstances may change, for example if health deteriorates or a death occurs. It may be that long term care become an issue, or you may simply want to mitigate your Inheritance tax liability and pass on your estate to the next generation.