Planning for Retirement
Planning for Retirement
For a lot of people, retirement means stopping work. To us it means being able to afford the lifestyle you desire without the need to work. A secure, comfortable retirement is everyone’s dream and because we’re living longer we can expect to spend more time in retirement than our parents or grandparents did.
Helping you clarify and define the lifestyle you want in retirement is the first step we can help you with. The second step is making sure you will have sufficient wealth to afford that lifestyle and we can help you plan for this too.
We often find that because our clients have such busy lives, or just because they have never sat down to really talk about it, there are often no clear retirement goals. Imagine just for a moment what you would have done today if you didn’t have to work. What about next week and the month after that? It can be hard to do this well in advance which is why planning for retirement is an ongoing process. Even if some broad plans can be made, that is a brilliant start. We will help you do this.
Almost everything we do has a financial implication. This is one of the most challenging aspects of planning for retirement. We will work with you to put plans in place so you can have confidence that you can afford to do what you want and that you will not run out of money. Understanding your finances puts you in control of your time. Why continue working if you don’t want to and can afford not to? It sounds simple but many people just don’t have the confidence to make these big decisions. We will put you in a position where you understand your financial situation and have the confidence to make these important decisions. We will be with you every step of the way.
Once you get to the point where you want to retire or partially retire we can help plan your income strategy. You may have a number of assets (such as pensions/ISAs/Unit Trusts/Bonds etc) from which you could take a capital sum or an income. We can help you plan this in the most tax efficient and appropriate way given your objectives and circumstances at that time. This makes sure you get the most from your money; be it in tax saved or extra income. Again this is likely to be an ongoing process as your circumstances and legislation change. We will be with you every step of the way.
The value of pension investments and the income from them can fluctuate and investors may not get back the full amount invested. Past performance is not necessarily a guide to future performance. Please contact us for more information on our range of pension portfolios.
Did you know… only 6% of people are on track to have the level of income they want in retirement
A recent survey found that just 6% of people are on track to achieve the retirement they want, despite the increasing focus on pensions and major government initiatives in this area. The average person now wants a retirement income of £41,000 a year, but expects to have an income of just £18,000 when they come to retire. The survey also found that over half (53%) of people had never checked the performance of the pension or other retirement savings.
Some of the Questions We Can Help Address
We can help answer any questions you may have in relation to planning for retirement. Questions such as:
When can I afford to retire?
What investment returns am I getting from my pensions?
Should I consolidate my pensions?
Can I fund my retirement with other savings and investments?
Can I realise my retirement dreams?
What kind of portfolio of funds should I invest in to fund for my retirement?
How much should I save for my retirement?
What charges am I paying on my pensions?
Can my pensions work harder for me?
What might my total income be in retirement and what lifestyle could this give me?
Should I downsize my house to help fund my retirement?
What kind of portfolio of funds should I invest in to fund for my retirement?
Not Just Pensions
For many people, pensions play a large role in funding their retirement. There are a number of great benefits for using pensions such as the tax relief that can be received and the ability to take part of your retirement income as a tax-free payment.
Although pensions can be a fantastic way to provide a lump sum or income in retirement, they are not the only way. Any other form of investment can be used such as ISAs, investment bonds or savings. Some people use property income through a buy-to-let investment or release some of the equity in their home to fund their retirement.
In many cases, a mixture of income sources will be used to fund retirement. The specific combination will vary from person to person and needs to be considered carefully. How and when to use each source of income can make a significant impact on your retirement income and this is where it usually pays to talk it though with an experienced financial planner who can provide a detailed plan based on your specific needs.
Some of the main sources of retirement income:
- Personal pensions
- Company pensions
- State pension
Other Savings & Investments
- General investment accounts
- Investment bonds
- Savings accounts
- Buy-to-let investments
- Overseas property investments
- Equity release
Make retirement a time to follow your passions
The Different Types of Pension
There are many different types of pension and this can be confusing to many people. Broadly,all pensions fall in to one of three distinct categories:
Anyone can take out a personal pension to save for their retirement. There are many different types including lower cost ‘Stakeholder’ policies, flexible ‘Self-Invested Personal‘ (SIPPs) and standard policies. Each allows you to invest in a range of different assets and can be build up tax free until your retire. You can then either take and income and/or lump sum from the policy or purchase an annuity to provide an income for the rest of your life.
Company pensions are those set up by employers for their staff. They can be set up on a ‘final salary’ basis or ‘money purchase basis’. Both the employer and employee can contribute to invest in a range of different asset types. As with a personal pensions, you can either take and income and/or lump sum from the policy or purchase an annuity to provide an income for the rest of your life.
The Key Benefits
Our retirement planning services will ensure you are completely financially secure when you stop working – free to enjoy your time and achieve your remaining life goals. Here are just a few of the main benefits you will enjoy:
Understand how much you can take from your pension without ever running out of money
Use an optimal range of investments to fund your retirement
Consolidate your pensions to make your life simpler
Pay lower charges on your pensions and get better investment returns
Get the highest retirement income possible
Really understand your pensions and get the most from them
Know how much you will have to live on in retirement
Track your pension investment performance 24/7 from any device
Have a clear strategy and plan to fund your retirement
Have a really enjoyable retirement
” Very impressed with the warm, professional service. Will be recommending your company to friends & family. “
Christina E. (New Forest) | NorthStar Client
” Don’t simply retire from something; have something to retire to. “
Harry Emerson Fosdick
Retirement Planning Services
We offer a number of services to help you enjoy the retirement you really want:
Starting a Pension
When it comes to thinking about your retirement and starting to save, there is no better time than right now. The earlier you start saving into a pension, the bigger your retirement income is likely to be through the power of compounding. We can help source the best pension for you needs to ensure your money really grows. Whether it is low charges, great administration or stellar fund performance, we can help you get a great new pension set up.
Pension planning is about looking at the bigger picture. How do you want to live when you are retired, how much income will you need and how can you generate this income? Our retirement planning services look at far more than just your pensions. We look at all your investments and help you work out how much to put away and exactly how to invest to make sure you can enjoy the retirement lifestyle you really want.
Pension Review Service
Many people accumulate various pensions throughout their lifetime. This can leave a disjointed situation without a clear and consistent investment strategy. In addition, many older pension policies may be subject to high fees, suffer poor investment performance, have opaque charging structures and poor service. We can help assess you overall pension position and look at consolidating and simplifying yourpensions to put you back in control and get your pensions working hard for you.
Pension Investment Management
Managing the money in your pension is crucial to ensure it works as hard as possible for you. We ensure our clients’ pensions are invested in the very best funds that will provide strong growth. We also help ensure our clients take on no more risk than they are comfortable with and provide regular investment updates to help them stay totally in control. In fact, we manage pension investments in just the same way as our acclaimed investment management service which also includes all the benefits of the client portal so you can keep track of your investments 24/7.
Getting your retirement strategy right is crucial. There can be several key times in life where you need to make the correct choices. This may be when you are considering which of your assets can be used to fund your retirement, when you are approaching retirement and looking to take an income or when you need access to some tax-free cash for example. The choices you make at these times will often have a huge bearing on the lifestyle you are able to enjoy for the rest of your life. We can help put the best retirement strategy in place and help you make these key strategic decisions.
Income Drawdown Investment Management
Many people choose not to purchase an annuity with their pension, instead keeping it invested, drawing an income directly from their fund. Managing the investment strategy and level of withdrawals of these drawdown policies is extremely important to ensure you don’t run out of money. Our investment approach provides income generating portfolios that are perfected matched to your ability to take on investment risk. We manage drawdown investments in the same way as our investment management service which also includes all the benefits of the client portal so you can keep track of your investments 24/7.
Drawing Your Money from a Pension
There are several different ways you can take your money from a pension when you come to retire. Each method has pros and cons and must be considered carefully. Making the right choices and getting the best deals can have a significant impact on your retirement lifestyle.
When you come to draw your pension, you will usually be entitled to take a quarter of it tax-free. Whether as a lump sum or as a quarter of each withdrawal, this is a great feature of pensions. In some circumstances, you may be able to take in excess of 25% as a tax-free sum. Care needs to be taken to ensure you don’t lose any such entitlement by transferring such a pension.
An annuity provides a regular income for life in exchange for a lump sum. Purchasing an annuity can mean losing the flexibility to change what your draw from your pension, but is does provide a high degree of certainty as to the level of income you will get in retirement – no matter how long you may life. In addition, generous, higher rate annuities are available for those with health issues and this may provide a good option for some.
You are free to draw any amount at any time from your pension as long as you pay the required income tax. This flexibility needs to be carefully managed to ensure you don’t run out of money in later life. This can be done by carefully assessing the level of withdrawals and maximising the investment returns from your pension in retirement. Income draw down needs careful monitoring and ongoing assessment to ensure it remains viable and the best income alternative.
Make your retirement the happiest time of your life