If you still haven’t got around to planning your retirement, you face an uncertain future. The basic State Pension is now barely enough to live on comfortably, and inflation continually eats it away. When the State Pension was introduced in 1908, it was estimated that the average retiree would probably only live for three years after stopping work. Nearly 100 years later, medical advances mean we could live well into our nineties – if not longer!
It all boils down to a lack of money in the State Pension pot to look after everyone, so the sooner you take charge and plan to provide for yourself in retirement, the better.
Your wealth creation plan should come into its own once you’ve retired and allow you to enjoy a similar standard of living as you had when you were working. Pensions and investments will form the bulk of the retirement section of your plan, and the earlier in life you start to benefit from tax-free savings and compound interest, the better. In fact, putting off saving for your retirement until your mid-thirties could end up halving the final amount in your retirement pot!
Contact 1st Financial Foundations Independent Financial Advisers today on 01908 523 420 to start the ball rolling.
Although private pensions have taken a bit of a battering in the last few years, they are still an extremely easy, tax-efficient way to build up a retirement nest egg. The biggest benefits of a pension include a tax-free cash lump sum of 25% of your fund upon retirement and a regular steady income derived from buying an annuity with the remaining 75%.
Planning for your retirement is possibly the most important financial decision you will ever make. With life expectancy increasing year on year, we are now seeing the potential to spend almost as many years enjoying retirement as we have spent saving for it. Planning for it correctly will provide you with the standard of living you wish after you stop work.
1st Financial Foundations work with you to consider all the options, based on your needs and risk appetite. We are Pension Transfer Specialists and as part of the financial planning process, it is our job to blend the savings vehicles that will yield the most efficient income in retirement.
Forward planning for your retirement can mean having the reassurance of financial security in later years, rather than the worry of wondering how you will cope. A comfortable lifestyle in retirement is something to which we all aspire, and increasing longevity means that we all need to make extra provision for that retirement.
Whether you are making provision for your spouse and children, ensuring that those you wish to benefit from your assets do so, or whether you wish to protect assets from exposure to Inheritance Tax, it is absolutely vital that you undertake proper estate planning and make a Will.
The trouble with leaving it until it’s too late is that, with no Will, your wishes may not be fulfilled, and you could potentially land your nearest and dearest in a bit of a mess, which is the last thing they’ll want to have to think about when all their thoughts are occupied with grieving.
If you’re not married to your partner, then having a Will is even more important. Cohabiting couples don’t have the same rights as those who are married or in a civil partnership.
At 1st Financial Foundations, we can help guide you through the Will writing process in a sensitive and professional manner. You’ll be left with peace of mind, happy in the knowledge that when you die your money and possessions will be distributed as you wished and that it will be straightforward for your loved ones.
The vast majority of people put off making a Will for a variety of reasons, either believing that the people they would wish to inherit will automatically do so, or because they don’t think it is relevant to them at this particular time.
The reality is that you can put off making a Will until it is too late. This poses all sorts of problems for the people left behind and could mean that some or all of your inheritance either goes to the wrong person or to the state.
Firstly, and most importantly, is the peace of mind making a Will provides.
Making a Will enables you to plan exactly what will happen to your property (estate) following your death. This ensures that those you would like to beneﬁt actually do so, in accordance with your wishes and at the same time avoiding any possible disputes between relatives.
The answer is everyone. In particular, anyone with dependant relatives (children under the age of 18, elderly relatives or relatives with a disability who have special needs), anyone who owns property or has any type of asset which you would wish relatives, friends or charities to beneﬁt from.
This is a common misconception and dependant on the size of your Estate. There are set rules which will be applied to determine who inherits and how much if you do not make a Will.
This is called having 'died intestate'. There are speciﬁc rules of intestacy which set out who will inherit and by how much if you do not leave a valid Will. This may not be what you would have wished, and, in the worst case scenarios where relatives cannot be traced, your assets will be taken by the Crown.
Despite the great returns from property in recent years, over the long-term stocks and shares have out-performed the property market and are worth considering as the backbone of your retirement planning.
Ideally your wealth plan should be set up to balance your objectives with the amount of risk you are comfortable taking with your money. For example, do you want to leave the interest generated on your capital in place to grow or would you prefer the interest to form part of your income when you retire? Would you be happy with higher-risk investments for the potentially greater capital rewards or would you lie awake at night worrying about losing your money? These are questions an Independent Financial Adviser can help you answer.
1st Financial Foundations can help you make informed decisions about the investment choices that are right for you by assessing your life priorities, goals and attitude towards risk for return. Any number of changing circumstances could cause your wealth to diminish, some inevitable and some unpredictable – new taxes and legislation, volatile markets, inflation, and changes in your personal life. Structuring your wealth in a way that minimises the impact of these changes is essential.
At 1st Financial Foundations, we understand that not everybody is comfortable with investing, and so we’ll make sure you can achieve your financial objectives in a way that doesn’t leave you suffering sleepless nights.
The value of investments and the income derived from them may go down as well as up, and you may not get back the amount originally invested
We all dream of the perfect retirement – spending our days doing whatever we wish, whether it's taking up new pastimes, spending more time with the family or going travelling.
No one wants to spend their future years worrying about their finances and being unable to do things they enjoy, which is why it's important that you're financially prepared. However, preparing for retirement doesn't happen overnight. It involves much time and consideration, and the decisions you make can have a significant impact on how you live your retired years.
If you're anxious about doing this alone, 1st Financial Foundations can offer a retirement planning service where we can help put together a realistic plan for you. Not only will this take the weight off your shoulders, but you may also have a greater chance of achieving your objectives and fulfilling a comfortable lifestyle in retirement.