Five Retirement Planning Tips

Given the current level of economic uncertainty, more and more people are reviewing their retirement plans, whether they are planning to retirement in the near future or whether they have recently retired.

We thought we would share five tips when reviewing your retirement plans.

Tip #1 – Define Your Ideal Lifestyle

Having something to retire to is a well-known cliché but many people find that this is actually difficult to achieve.

A successful retirement takes some planning and can incorporate several different phases; for example, taking an extended holiday, further education, being engrossed in a hobby, part-time work, volunteering and spending more time with the family.

Tip #2 – Review Your Financial Plan

It makes sense to regularly review your financial plan – or to create a financial plan if you don’t have one.

There are a number of assumptions that are used to model future cash flows, for example, around future inflation rates, interest rates and expected future investment returns and these should be reviewed and stress-tested to ensure that you remain financially comfortable throughout retirement.

Different scenarios can also be modelled to ensure that your financial objectives in retirement remain achievable.

If you are planning to retire in the near future, your financial plan can help you determine whether you need to save more in order to generate the income you need. It may show that you can retire earlier than expected or that you may have to postpone retirement for a year or two.

Tip #3 – Have a Contingency Fund

Building up a contingency fund in easily accessible, liquid cash is important especially when investment markets are volatile. Having to sell investments at an inopportune time to fund income withdrawals can have an impact on your overall financial planning strategy.

Tip #4 – Review Your Existing Financial Planning Assets

Many people have a range of different financial planning assets accumulated over the course of their working lives. For example, several different workplace pensions, a range of ISA investments, a few single shares and, perhaps, a number of different savings accounts.

It would make sense to review your assets, consolidate your pension policies where appropriate and determine whether the assets you hold are working for you by helping you move towards your retirement objectives.

Tip #5 – Review Your Investment Strategy

Taking a long-term disciplined investment approach is a vital part in any financial planning strategy. Too many people make knee-jerk reactions when markets fall only to miss out when markets rise. One of the key services a good financial planner performs is to be their client’s behavioural coach and stop them making ill-advised investment decisions at inopportune times.

Summary

The current level of economic uncertainty can seem incredibly daunting especially for those who are planning to retire shortly and for those who have just retired. Having a well thought out, long-term financial plan can relieve much of this anxiety and provide the reassurance that your retirement plans can be met.

Next Steps

We are specialists in retirement income planning and if you would like a free, no obligation meeting to discuss your retirement plans, please do get in touch using the button below.