Retiring With Attitude! Checking Out the Finances.
| Published: 4th July 2008 22:03 |
One of the biggest concerns facing many people as they approach their retirement day (RD) is, will I have enough money to be able to fully enjoy my future years of leisure?
Two things will have an impact on a retiree's financial liquidity. They are, not surprisingly but worth mentioning, money coming in and money going out! The former will most certainly reduce and, unless plans have been made in advance, the latter will potentially remain roughly the same.
So, if you have worries, concerns, doubts or even niggles about the potential for spending your retirement in some degree of comfort, what can be done now to give you the edge?
To an extent that very much depends on how close you are to retirement. Covering all bases in this article would be a challenge, so let's assume that you have 10 years or thereabouts to go to your retirement date. If you've a longer lead in time that's great but don't get complacent. If your RD is just around the corner, then perhaps you need to spend some urgent and quality time on this subject!
As I mentioned in the first of this series of articles, all I can offer here is some food for thought rather than advice on specific issues. However, there are lots of websites out there that can give you further information, and plenty of experts ready, willing and (usually) able who can help you to plan effectively for your RD.
‘Money Coming In'
Let's take a look at this all important factor by asking two simple questions:
1. Where will my money come from?
2. How much will I get?
Making a list of the answers to the first question should be reasonably straightforward, and will most likely include sources such as State Retirement Pension, Company Pension, Private Pension, Savings and Investments. For some there may be a wage from part-time work if needs must or perhaps plans to do start a small business (just for fun of course!).
If funds are tight there is always the option to sell the family home and buy somewhere cheaper to release capital and pay off (hopefully) any remaining mortgage. Alternatively you could look into the Equity Release market which will enable you to cash in on the equity in your house without having to move out. However, this can be a financial minefield so do consult a Financial Advisor who is experienced in this field before you make any rash decisions.
Most private and company pensions will provide a lump sum as well as an ongoing income, but how much you receive will depend on getting the best annuity rate for the latter. The important thing to remember here is that you don't need to accept the annuity offered by the provider of your pension fund. You can take the open market option and get a much better deal. If your health is not great or you are a heavy smoker for example you can often get a better rate because the annuity provider, sorry to say, doesn't think you'll last that long! Again, do consult a Financial Advisor to guide you and help you to get the best value for your money.
The time has come to Take Action!! So, do as many of the following as you can (but definitely the first two):
• Make that list of where your money/income will come from
• Find out how much you are likely to get from each source
• Review your current savings and investments and check their
past/current performance and explore their predictions for the future
• Find a good Financial Advisor and start talking
• Start researching the internet for help and advice
• Buy financial magazines and beef up your knowledge
• Read the financial pages of the Daily and/or Sunday newspapers
• Start a file and keep all the information you obtain close to hand
Take a look at these websites for starters:
http://www.fool.co.uk/
http://www.thisismoney.co.uk/
http://moneysavingexpert.com/
www.saga.co.uk
www.ageconcern.co.uk
As for me, well I'm starting to gather this type of information myself. I've got three company pensions (two of which have been converted into private pensions via an individual buy-out policy) and the State pension to look forward (?) to. Once this is all to hand I've a Financial Advisor in mind who I'll be asking to take a look and advise me what my best course of action will be.
I'm even contemplating drawing down on the policies now if I can to release the lump sums and provide a small income. That may or may not be a good idea, but that's where the guidance of a Financial Advisor comes in.
Next time I'll be looking at the ‘Money Going Out' side of the equation. In the meantime, here are a few questions to be getting on with:
• What kind of a lifestyle will you want to support in retirement?
• If you had a choice would you still be working (even part-time) when you ‘retire'?
• If you would like to work what kind of work would you do?
• If you have a mortgage what are your plans to pay this off before or when you retire?
• How concerned are you, on a scale of 1 to10 (where 1= extremely concerned and 10 = not at all concerned) about the amount of income you will have available when you retire?
Write your answers down as suggested last time and keep them safe.
That's all for now. Until next time ............
Thanks to Paula Heap from the Life Coaching Practice for this advice.
Community Comment:
Add your comment:
You will need to sign in to post a comment to this article. if you do not have an AboutMyArea account, you can join now for free.
