One of our first questions when discussing individuals’ retirement plans is “How much income do you want when you retire?” Often this is met with a blank face. So where would we start?
The first question to ask yourself is when do you expect to retire? Retirement is one period of your life that needs to be planned for. You may need to prepare for 30 years or more without a working income, and this is a period of life that should be enjoyed.
After this you need to work out how much income you will need. A starting point is to look at your current expenses and subtract any payments that should cease in retirement. This should include your debts and work expenses. Everyone’s goal should be to make sure any debts are repaid before retirement. To ensure this you need to plan for it. On numerous occasions people have come to us just before their retirement with mortgages still outstanding, asking us to help them plan how to repay these. I always wish they had come in earlier. It’s too easy to put it off, but the earlier you seek help the easier the solution. Another reason is that the longer the repayment period the less the monthly payment.
It is likely that in the early years of retirement you will probably do more as generally you are fitter and healthier and this should also be factored in.
Once you have an idea of what your expenses will be, the next stage is to look at how much income you will have coming in. It’s quite simple to obtain a state pension forecast of when and how much your projected state pension will be. Then you need to look at all the other income you will have including Pension income. Individuals often seek our advice armed with a number of different Personal Pensions asking if we can consolidate these. Care needs to be taken and each pension plan needs to be assessed, as there could be valuable benefits within the individual policies.
For your peace of mind we do offer a free, without obligation consultation to discuss our advice process with you. Contact us now to book your free consultation