This is likely to be the most expensive goal to sufficiently fund for and can be the most complicated with all the different tax regimes and restrictions now in place for higher and additional rate tax payers. The fact that we are all living longer means one has to rely more on personal assets for a longer period of time, to ensure a comfortable retirement.
The goal for financial independence during retirement is important to most people and they want to make sure they can maintain their standard of living in retirement. We will take you through the journey, helping you build financial security with realistic expectations, identifying what needs to be done and when.
At Fidelium Financial Planners Limited, we believe that retirement is more than just planning for the future; it’s about making the most of the here and now.
We take time to understand what that means for you and make sure all of the important things are covered, whilst helping you make your ambitions for your retirement a reality.
The days when you could simply slip into retirement, confident that your company and state pension would be there to support you in your golden years, are now just a dim and distant memory. With the government’s purse strings under increasing strain, planning for our own future should be a top priority.
Whether you have just started out on life’s journey, or counting the days to retirement, pension planning should be high on your wealth management agenda. However, you will have very different needs and objectives depending on which part of the journey you are on.
Planning retirement: Whether retirement is many years away or just around the corner, unless you start planning for retirement now, there is a great danger that you could outlive your savings.
The earlier you start planning, the easier it will be to create the retirement lifestyle you want.
The stark reality is that the majority of us need to save more.
With people living to a greater age, retirement now represents a far bigger proportion of our lives than previously expected. We all must accumulate more when we are earning to meet the extra costs of living longer. The decisions we make today will dictate the standard of living we will enjoy in retirement.
The golden rule is to determine exactly how much you are going to need in retirement – and to start planning for it now.
When approaching this life stage, the right type of advice can make a huge difference. More active lifestyles, changing working patterns and longer life expectancy have changed the way people now approach retirement; the gradual gliding steadily into retirement rather than starting at a specific point in time – is on the increase.
This, in turn, has led to the development of more flexible solutions to meet the retirement needs of a new generation. And whilst pension freedoms have certainly opened up more opportunities for savers to access their funds, so comes with it some hidden dangers.
Retirement is a time to ensure that the benefits you have saved for throughout your life and accumulated over a lifetime, are able to support your lifestyle when you stop work, tax-efficiently.
Since pension freedoms were introduced in April 2015, individuals no longer have to buy an annuity with their pension pot but can take benefits in a variety of ways. This includes the option to keep the pension invested in retirement and/or withdraw cash as required.
There are two ways you can access your pension flexibly. Which option you choose will largely depend on how you wish to receive the tax-free part of your pension, whether you still want to make substantial pension contributions in the future, and whether you would prefer to receive a regular income or lump sums.
But whilst increased flexibility in pension income is welcome, the need for advice when preparing for retirement has never been more important.
Freedom has given rise to hidden dangers and increased the likelihood of people making ill-informed decisions.
One danger is that people on lower tax bands could take all, or a large part, of their pension fund and unwittingly push themselves into a higher rate tax band, or exhaust their pension pot resulting in it not lasting their retirement.
You may well require guidance and advice around the new pension freedoms to help you make informed decisions based on your individual goals.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on the individual circumstances.
Life expectancy has increased significantly over the decades, according to the most recent report by Public Health England in 2018. Men can now expect to live for a further 19 years at age 65 (to age 84) and women for a further 21 years at age 65 (to age 86); so it’s very important to build a retirement fund that is large enough to last long enough.
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