What Does Retirement Planning Mean For You?

Retirement is often seen as the end of one chapter and the beginning of the next. Planning for it isn’t just about getting your money organised, although that’s obviously very important.

Depending on your circumstances, you may want to take the opportunity to completely change your lifestyle, move home, start a new business, travel the world, learn a new skill or simply put your feet up. And like all big projects in life, the more time you can invest in thinking it through, the better the outcome will be.

Managing Your Money

Getting financial planning advice before accessing your pension pot can go a long way to help alleviate financial worries later on in life. With longevity increasing, more people than ever will spend longer in retirement than previous generations.

The changes in legislation have given those about to retire far greater freedom when it comes to using their pension pot, but freedom brings with it greater individual responsibility. Low interest rates and periods of market volatility can make income planning for the future a difficult task without professional advice.

It is generally agreed that spending in retirement tends to follow a u-shaped curve. People often spend more money in the early, more active years of their retirement, with spending decreasing in the middle years and increasing again later in life when additional care and medical expenses are more likely to be required.

Budgeting For Your Lifestyle

It makes sense to begin drawing up a budget for your retirement that covers your likely income needs. There are various factors to consider. You may have income from employment, equally you could choose to give up work altogether and tick off the items on your bucket list. You may decide to downsize from a family home to a smaller retirement apartment that is cheaper to run and means you can extract some equity to bolster your income.

You may want to help children or grandchildren financially by paying for school fees or helping them with a deposit for a home of their own. You will also have to plan for a time when you might need to pay for help around the house, and for the likelihood of needing medical and nursing care in your later years. Taking professional advice can help by creating a roadmap for your financial future.

Paying For Life When You Reach 100

The good news is that more of us are reaching our 100th birthday, but two million elderly people in the UK have a care-related need and it is estimated that four million will need daily help by 2029.

If you find yourself needing care, your local authority must calculate the cost of your care and assess how much you have to contribute from your own resources. Currently, anyone in England with assets over £23,250 must pay the full cost of their care. Different figures and eligibility rules apply in other parts of the UK.

Many people simply use their savings and investments to pay their fees, and we can advise you on the best way to do this. There are also property-related options such as equity release that can help you access the money tied up in your home, or a deferred payment agreement where your local authority helps with the cost of care and recoups the money when your property is sold. There are also specialist long-term immediate care plans that are purchased with a lump sum and in return pay a guaranteed income for the rest of your life.

Think carefully before securing other debts against your home. Equity released from your home will be secured against it. Your home may be repossessed if you do not keep up repayments.