As a keen climber and mountaineer, I often compare retirement planning to climbing a mountain. On this journey, safely coming down is as important as getting to the top in a first place. In the past, more people had secure pension benefits and had to make fewer financial decisions. Contrary to that, we now need to make investment decisions and find the right provider for our precious life savings.
When it comes to retirement you may have multiple needs and goals. You might be thinking about holidays and dream destinations you had no time to visit during your busy working life. Or, gifts to your loved ones. But above all, everyone needs peace of mind, knowing that they have enough to provide for a comfortable living. This brings us to the three pillars of happy retirement:
If that was not enough, financial markets continuously add worries to our lives. Each of these decisions don’t come easy and often leave us exposed. The secret is to come prepared and have your portfolio structured accordingly. As the old proverb says ‘there is no such thing as bad weather, only bad clothes’.
One of the roles of a financial adviser is to help you discover your true goals and aspirations and equip you with a strategy, so you can have a safe journey. At Ebor we use the cash flow modeling tool to help our clients to visualize what their future position could look like. While this does not guarantee that the future will turn out to be exactly how we expected it to be, we find that this gives our clients comfort knowing that they are well prepared for future uncertainties.
Traditionally many people associate retirement with annuities, pensions and drawdown. However, there are many other tax efficient options available to you at this important milestone. For example, Investment Bonds can be used to provide additional tax-deferred income in retirement, which can complement your income from other sources. Furthermore, effective use of trusts alongside the investment bond can provide further planning opportunities and help you to preserve the family wealth from an unwelcome IHT liability.
Besides pensions, ISA’s remain one of the most tax efficient and flexible investment products available in the market place. So, if you’ve got cash or investments generating income, you might want to consider sheltering them in a tax wrapper, like a stocks and shares ISA.
Releasing value from your home is another option which often gets overlooked. For many, this might be the most precious and expensive asset that we have. If moving to a different location or downsizing does not appeal to you, equity release will allow retirees to achieve better quality of life in retirement while still enjoying the comfort of their own home.
As we now live longer retirement opens a whole new world of opportunities. At the same time, we all need to be savvier with our investments to make our savings last for our lifetime and beyond. It is a widely known fact that our worries multiply when we are left alone to make important financial decisions, which breeds on uncertainty. Our role as your IFA is to be there for you when you are not sure which path to take. For over 30 years our clients have trusted us to look after their financial affairs. If you would like to take the opportunity to review your financial affairs and check if you are on track, feel free to contact us.