How do you feel when you think about your retirement savings?
If worry, panic, or confusion are the first things that come to mind, you aren’t alone. In fact, research from Standard Life has found that 1 in 5 Brits is losing sleep over their retirement planning, and 15% believe it has affected their mental health. What’s more, 62% of those who felt this way haven’t sought help to overcome the problem.
With World Sleep Day just around the corner on 15 March, you’ll be pleased to know that there is something you can do to ease your worries about retirement and finally have a good night’s sleep.
Read on to learn about the different ways working with a financial planner can put your mind at ease and help you to look forward to retirement.
1. They can help you decide what you want from your retirement
Traditionally, you’d work until your retirement age, then the following morning you would wake up with your next chapter stretching out before you. Once retired, you might have taken up hobbies such as gardening to fill your time.
While this might still appeal to some, you now have many more options available to you when it comes to retiring. So, the first step in creating an effective plan is to identify exactly what you want your post-work years to look like.
For example, you might decide that you’d prefer to phase into retirement by continuing to work part-time or setting up your own business. Or maybe you’d like to travel the world for a few years to make the most of your new-found freedom.
Take your time on this and let your imagination run wild. Then your financial planner can listen to your thoughts and help you to create a set of retirement goals that make you feel really excited about the future.
2. They can assess if you are on track to achieve your goals
Once you have established what you want your retirement to look like, it’s time to calculate how much income you’ll need to fulfil your ambitions.
Your planner can help you to clearly visualise this by creating a cashflow forecast. This specialised piece of software uses data about your existing income and assets, liabilities, expected retirement date, and anticipated retirement income needs to illustrate your predicted net worth at any point in your lifetime.
It will use assumptions about investment returns and inflation to show how your retirement savings and estate could grow over the coming decades. When plotted against the income needs you have identified with your planner, you’ll be able to identify whether your savings are on track to be able to meet these needs.
3. They can create a plan to address any shortfalls identified
When you have an up-to-date cashflow forecast, you’ll be able to see if you are on track to achieve your goals. If your forecast has identified that you may experience a shortfall in income, your planner can help you to create a plan to address this sooner rather than later.
Together, you’ll consider how you could increase your retirement savings or make them more sustainable. This might mean:
- Reducing debts
- Increasing your pension contributions
- Tweaking your plans to be more achievable
- Making the most of any tax relief you may be owed.
When you have a plan in place that’s achievable, you can rest assured that you’ll be better able to overcome any challenges while saving for your retirement.
4. You’ll have regular meetings to ensure your plan is still appropriate
It can help to view your financial plan as a living document. Once it’s created, you’ll meet with your planner on a regular basis to review your progress and check that the plan remains appropriate for your needs.
These meetings might take place annually, or more frequently. As well as checking that your plan is on track, you can also use this time to update your planner on any new developments in your life that could affect the plan you have made.
Your planner can also fill you in on any external developments that might affect your plan, such as inflation, investment returns, and economic performance. These regular meetings could help to provide peace of mind that, no matter what may change in your life, your planner can help to ensure your retirement savings aren’t negatively affected.
5. They can guide you through life events that affect your finances to ensure they don’t disrupt your retirement savings
Sometimes, unexpected events can occur that might have an impact on your retirement savings. For example, you might inherit some money unexpectedly, or be unable to work for a period of time due to illness.
When this happens, it can be tough to choose the most sensible course of action for your finances.
This is another time when your financial planner can help, as they will be able to guide you through the emotions that you might be experiencing and help you to consider your options carefully. This could help you to make the most sensible financial choices for you, removing an element of stress and mitigating the impact on your retirement savings.
At time likes these, you may be relieved to have the help of a trusted financial planner who is familiar with your circumstances and goals.
Get in touch
If you’d like to learn more about how we can help to put your mind at ease about your retirement savings so that you can have a good night’s sleep, please get in touch.
You can contact us by emailing financial@barwells-wealth.co.uk or by calling 01273 086 311.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate cashflow planning or tax planning.
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 performance.
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.
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