Taking your retirement after years of hard work and saving is a real milestone achievement. As you relax into your post-work years, you may be excited by the prospect of setting out on the adventures you’ve been planning.
While your retirement may have started, it’s no time to stop planning. In fact, continuing with your regular financial planning meetings could prove to be crucial if you’re to stay on track for achieving the goals you have set.
Read on to discover five reasons to continue financial planning throughout your retirement.
1. Understand how much to withdraw for today’s expenses while still saving enough for later life
When you retire and begin taking an income from your pension or other sources, you may find that building up your savings was the easy part. Understanding how much you can afford to withdraw today for your living expenses while keeping enough set aside for your later-life needs can be even more complex.
It’s likely that your income needs will fluctuate throughout your retirement. You may wish to make the most of your new-found freedom in the early years by travelling and taking up new hobbies. Whereas, in later years, you are more likely to require funds for healthcare.
By continuing to work with your planner, you can continually review the rate at which you are withdrawing from your savings. This can help you to feel confident that you’re making the most of your time and money, while also being sensible about what you may need in the future.
2. Respond appropriately to external economic factors that could affect your finances
Sometimes, factors outside of your control can affect your personal finances. Events like market volatility, inflation, and rising interest rates can all put pressure on your finances.
Under these circumstances, even the most carefully constructed retirement plan can require some amendments.
Your financial planner can keep you informed of any developments in the economy or stock market that could affect the way you are taking an income from your pension. They can also offer timely advice as to the most sensible steps to take to mitigate any negative effects these developments could have so that your retirement plans can stay on track.
3. Careful tax planning can help you to avoid incurring additional tax charges
Having worked and saved for many years throughout your career, tax planning can help you to keep more of those savings in your pocket.
The tax rules surrounding your pension and retirement income can be complex; without the correct information to hand, you could inadvertently push yourself into a higher tax band or trigger a tax charge when you come to withdraw from your pension.
If you are married or in a civil partnership, there are some helpful tax reliefs that could be available to you. By being strategic with your tax planning, you could save yourself a significant amount, which you can subsequently put towards your retirement goals.
4. A trusted partner can help you manage your affairs during difficult life events
Retirement can be a wonderful part of your life, but that’s not to say that you won’t face difficulties and challenges. The death of a loved one or a change in your own health and circumstances can have a profound effect on your finances and those of your family.
Having a long-term working relationship with your planner can help them to develop a comprehensive understanding of your financial situation, your values, and your priorities. This can enable them to offer the most suitable advice and support for your family during times of grief or sadness.
As a result, you can feel confident that money worries won’t cause any further stress.
5. Keep your succession plan up to date as your circumstances change
Financial planning isn’t just about helping you to live the lifestyle you dream of today; it also helps you pass on wealth to the next generation of your family.
Through your retirement, you may find that your family circumstances change and evolve, sometimes more quickly than you could imagine. As a result, your succession plan could need some updates.
As you celebrate weddings, the birth of a new grandchild, and other exciting life events, thoughts of updating your estate plan can easily fall to the bottom of the to-do list. So, regular meetings with your planner will give you a helpful nudge to review your plan when necessary. This will mean your wealth can continue to support your family even after you’ve passed away.
Get in touch
Our planners are here to help you achieve your retirement goals and enjoy the lifestyle you dream of without money worries getting in the way. To find out more, please contact us and we’ll be pleased to speak to you.
You can get in touch by emailing us at financial@barwells-wealth.co.uk or by phone on 01273 086 311.
Please note
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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