Retirement do’s and don’ts

Everyone has a different idea of what an ‘ideal retirement’ is, which means the way in which people work towards retirement and plan for it will be different.

The best planned retirements are made from great and adaptable investment strategies, long-term goal planning and constant re-configuring to account for changes as they arise.

As we approach different stages and milestones in our lives, our retirement plan will require changes, often quickly.

The way we approach retirement is paramount, however, there are a few things to consider when thinking about retirement planning in order to get the most from it.

The dos:
  • Make a plan that lasts

For a lot of people, their retirement income eventually has to stretch much further than they’d anticipated due to circumstantial changes – meaning the income that they’ve spent years saving isn’t going to last the way they’d wanted it to.

One of the biggest contributors to a pension that lasts is strategic pension investments. 

If you’re clear on what you need from pension investments, when it comes to the income withdrawal strategy, you can specify how adaptable it needs to be and lay out the way these investments may increase or decrease your income.

The level of risk involved will depend person to person, but regardless, well-planned investments are the foundation for a plan that lasts.

  • Regular reviews

Rather than forming a plan that is left to its own devices, it’s important to keep an awareness of changing personal and economic circumstances.

If you review your plan regularly, you can keep your objectives on track and ensure your investments are getting the right trade-off as well.

This is where having a Financial Adviser comes in handy – keeping your retirement plan on course throughout changes is easier when you can review it with an expert who has an awareness of your circumstances and the next best steps.

The don’ts:
  • Withdrawing in periods of uncertainty

Manging your income levels during periods of uncertainty is best, however, a lot of people find themselves withdrawing from their pension fund during periods of market volatility.

Poor returns in the early stages of retirement are harder to recover from when losses occur.

Instead of taking money from your pension during a downturn, thus affecting the longevity of your pension fund, drawing money from other sources of income is far preferable to avoid these losses.

  • Underestimate the duration of your pension

It’s more common than you think!

Estimating your ‘survival age’ isn’t exactly something people look forward to, but it’s often vastly underestimated.

Rather than underestimating your survival age and potentially risking the longevity of your pension fund, always assume that planning for a longer duration is better.

The best advice I can give?

Seek professional financial advice.

Rather than leaving it to chance, you can protect yourself against the potential risks by navigating through them with a Financial Adviser, and have peace of mind that everything is on track.

Sovereign Wealth Limited is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website www.sjp.co.uk/products. Sovereign Wealth Limited is a Limited company registered in England and Wales, Number 07115386. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.