Keep on track with your retirement goals: five key tips

We all aspire to a comfortable retirement, hopefully free of financial or health burdens. Effective planning plays a crucial role in achieving your desired financial outcome.

While life can still throw curve balls at us, particularly with health, you can take steps to improve your financial resilience in managing for the unexpected.

Regular financial planning provides the opportunity to consider where you are now, where you want to get to, if there’s a financial gap identified, and how this can be filled before it’s too late.

If you don’t have the time or expertise to do this yourself, you may well find taking financial advice from a professional beneficial in considering your ideal retirement.

Tip one: Understand your retirement needs

Your retirement lifestyle will likely differ from one shaped by work and family commitments. Obvious financial changes include the end of your monthly salary and reduced or eliminated commuting costs.

You may also have paid off your mortgage, freeing up time for leisure. While more leisure time is exciting, it’s easy to overlook the costs that come with it, whatever those may be for you.

One thing is certain: inflation will continue, so it’s essential to factor it into your plans. Recent years have shown how financial plans can be disrupted by shocks like rising energy prices.

As we age, long-term care costs may also arise, and this should be considered. A solid financial plan reflects what you want to achieve, potential challenges, and what is critical for your retirement needs.

Tip two: Project future financial scenarios

We’ve discussed before how cash flow planning can provide a helpful building block for wider financial planning. This is particularly the case for retirement planning, as multiple scenarios can be ‘stress tested’ – recognising we live in an uncertain world. These include your future cost of living, inflation, investment growth, and changes in interest rates.

A plan should be considered as being dynamic, with periodic reviews to reflect any changes in your circumstances or wider influences, which could mean we need to revisit the underlying assumptions.

Tip three: Make use of retirement planning tools

Our retirement planning brochure and retirement planning tool may be a good starting point, but there’s a plethora of planning options.

As we all live different lives, there’s no ‘one size fits all’ retirement strategy. Alongside considering aspects like the income you feel you’ll need in retirement, you should also think about ‘special’ plans such as holidays, and the level of risk you feel comfortable in taking. If you don’t want to take any investment risk, then purchasing an annuity for a guaranteed income for life might be right for you.

If you prefer a more flexible approach and are willing to accept investment risk to a greater or lesser extent, then an invested approach where funds are ‘drawn down’ over time might be right for you. Or perhaps, as is often the case, a mix of both.

With the support of a financial planner, a bespoke plan can be put in place and kept under review to optimise your opportunities.

Tip four: Seek professional advice

Retirement is a key life stage and therefore requires careful thought.  A financial planner can help you identify and prioritise your objectives, work with you to decide on your attitude to risk and capacity to absorb a loss of capital and devise a suitable long-term strategy.

Regular reviews will ensure that every effort is made to keep this on track for achieving your objectives.

Tip five: Review, review, then review your plan again

You may feel that you have a robust financial plan already. That’s good news. However, how often do you review it? Your circumstances can change – as can your aspirations – in addition to ‘external’ variables such as the financial climate. Keeping your plan under regular review ensures it remains relevant to you.

A tailored and regularly reviewed financial plan can have a significant impact on your retirement journey. There have probably never been more options available, which is positive, yet perhaps daunting, so a financial planning review may be just what you need to identify the most suitable approach.

It’s all part of what we call ‘meaningful money’: ensuring that your money supports you in achieving your retirement objectives.

If you feel ready to discuss your retirement plans, we would be happy to chat to you. Just get in touch to book a free one-hour pensions review with one of our specialist Financial Planners.

You may also be interested in:

• How we talk about money: part one
• How we talk about money: part two
• How we talk about money: part three

Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.

The information provided is not to be treated as specific advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity.

The tax benefits depend upon the investor’s individual circumstances and clients should discuss their financial arrangements with own tax adviser before investing. The levels and bases of taxation may be subject to change in the future.