A guide for planning the ultimate “vacation.”

Everyone loves a good holiday and none more so that hard working business owners. After all what are you working to build a business for. So, wouldn’t you agree, that planning for a vacation can be a lot of work. You know what it’s like, researching destinations, booking transport and hotels, and, of course, packing can take up as much time as the holiday itself. But how much time do you spend planning for what could be the greatest holiday of your life? Retirement.

Six Retirement Realities

Before you start planning, it is important to understand some basic truths about retirement.

1. It’s a long journey or at least I hope it is.

We are all living longer, it’s a fact. For a married couple ages 65, one partner will, on average, live to be 90 or more. And based on medical advances, it is predicted we may soon be living to 120 and beyond. Whether you retire in five years or 50, you need to plan to be retired for a long time.

2. The day you retire may be the most you will ever have.

Once you stop working, the monthly pay cheques also stop coming in. You will need to be sure that along with your State Pension, you will have enough income to keep you going for the rest of your life.

3. Your retirement savings are worth less than you think.

Even if you have a big chunk of money invested in your pension, withdrawals are typically taxable and even though you have a tax-free cash allowance of 25%, tax is still due on the remainder.

4. Your retirement spending will probably go up.

Retirement obviously gives you lots of free time, but few things in life are really free. Hobbies, movies, eating out, travel, all cost money.

5. Inflation will mean you need to spend more.

You can be sure that everything over time will cost more.

6. Investing always comes with some level of risk.

The more risk you take, the higher the potential returns. However, the flip side is there is greater potential for your investment values to fall.

Planning Your Holiday (Retirement)

Just like any great holiday, meeting your retirement goals requires careful planning. The process begins by understanding clearly what you are planning for and to keep reviewing your goals and the resources you will be relying on.

So, with this in mind, here are a few questions to get you started:

  1. How much have I saved in my pension account?
  2. Do I have other savings and investments?
  3. How much will my State Pension benefits be?
  4. Do I plan to work in retirement and if so for how long?
  5. Will I receive an inheritance?
  6. Am I willing to spend down my capital in retirement?
  7. How long do expect to live and is there any family history if life limiting illnesses?
  8. Do I want to leave a legacy to my children or grandchildren?

In part 2 I will discuss what we need to think about when making sure we are building up sufficient funds for our retirement.

Action Call

Are you planning for a fantastic retirement? Not sure if you are on track?

Contact us to today. We can review your current situation and let you know what options are available to you.

If you would like to talk to about financial planning, please get in touch for a no-obligation meeting. Go to our website www.miadvice.co.uk and contact us via our “Get in touch” form on our home page or Contact Martin Dodd on 01902 742221.

Email us at financialplanning@miadvice.co.uk

It is advisable to take advice from a professional financial adviser when making major financial planning decisions.

Check out our other recent articles here

This article has been prepared in good faith and based on Midlands Investment Agency’s understanding of the law and interpretation thereof at the time of creation. The contents should not be regarded as specific advice and we always recommend that specific advice is sort from a qualified professional. No responsibility can be accepted by Martin Dodd or Midlands Investment Agency Ltd., for any loss that may occur by a person acting or refraining from acting on the basis of this article.