Managing your wealth throughout your retirement

Making good decisions now to support your dependants and family in the future, can help to reassure and give you peace of mind during your retirement

For some people life remains fairly unchanged, but what’s for sure is that there are always going to be ups and downs to contend with, and we believe that being prepared is key to managing your wealth throughout your retirement.

What’s clear is that there are a number of phases that we are all likely to go through at some stage in our 50’s, 60’s and beyond, all of which need to be considered and carefully managed before and during.

If you are approaching these key milestones in life or have already reached the point where you need additional support, taking financial advice can help you navigate these potentially complex and difficult decisions, and provide a reassuring level of preparation and guidance so you can concentrate more on the great plans you’ve put in place.

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To help you get thinking, we’ve put together some key considerations

A broad question, but one that is useful to consider. Whether you are phasing in your retirement or hanging up your apron on a Friday afternoon with the alarm clock off for Monday morning, you might want to think about what you will spend your time on.

You might be looking after family members occasionally. You might be booking sessions at the gym. Whatever your lifestyle may look like, looking at it in smaller chunks of 5-10 years rather than thinking of it as one large block of time to fill might make your planning a little less daunting.

It’s important to remember that this is your retirement, and you’ve worked hard to make it the best one you can have. That said, you may want to balance your needs with any desires to support your family financially, which is a natural thing to do, however careful thought needs to be taken to ensure that you retain adequate resources to maintain your own lifestyle first and foremost.

Our retirement experts use a range of tools to help you do this, one of which is called cash flow modelling. Here is a short video explaining how this works:

Cash flow Financial Planning

Think of this a little like a company balance sheet – set out all you have in terms of assets and liabilities – being aware of all your savings, investments, pensions, income sources, house value etc and balancing these against any debts or ongoing/future liabilities that you have currently, or may have in the future, is key to taking stock of where you are now.

Consolidation of your pensions is a good place to look at potential improvements. We’ve got a short video to explain this …

Pension Consolidation

Another essential task is to be aware of the various tax allowances that are available to you to ensure that you’re making the most of your money. Tax planning is for life, not just at retirement, and at Armstrong Watson we have experts placed across all areas of tax and financial planning to help you mitigate your own personal tax bill.

Budgeting is not a one-off task, and as we pass through life’s many stages, we often need to make adjustments and react to situations.

Establishing your income against your costs is a much more difficult task than many people anticipate. Our experience tells us that often people forget to account for the irregular spending such as Christmas and birthdays, the vet bills, window cleaner and so on.

A couple of things to revisit and help you with this are the PSLA Retirement Living Standards and the Armstrong Watson budgeting calculator - these will both give you more knowledge and understanding about the budget planning process that our retirement experts will guide you through.

As you pass into retirement and through the later stages in life, one of the most important things to consider is prioritisation and trade-offs. What is really important to you, and where can you identify areas to reduce your spending in order that you can achieve your priority goals?

Be realistic - Is it necessary to change your car every three years? Can you afford to change it more often, or might you need to set your sights a little further away? Do you really need to take three overseas holidays a year, when two might be just as good, topped up with a UK break. These are just some examples of conversations our experts have had with their clients in order to create sound and sustainable planning for the future. After all, you might be surprised to find out what you can achieve, meaning that you can live a fuller life using your assets in the most efficient way.

Even though you’ve set your budgeting up well at the start, rarely does this become the final version that’s suitable for years to come. As things change in the future it’s vital that your personal and financial plans are reviewed regularly.

You wouldn’t buy a brand-new car and then leave it underserviced and bereft of the latest engine software updates for the rest of its life, expecting it to perform as it did for you when you first drove it away from the showroom. The same could be said for the financial planning process.

You will change. Your circumstances will change. Your family needs will be different. The world around you and the rules and regulations surrounding financial products is ever-changing.

Keeping on top of these changes with simple, annual reviews, will ensure that you continue to withdraw your money in the most efficient ways, but you’ll also be adapting your plans to suit your circumstances and the regulations as they change too.

If you are receiving a more flexible income such as from an income drawdown product then this becomes a critical part of the process and should be reviewed each year to manage and control any associated risks.

One area we see quite often if the possibility to down-size your home as you get older and need less space. This can provide you with additional planning opportunities to make the most of any excess cash that this could generate – inflation can severely impact the buying power of this money and, as such, using the ongoing advice service provided by our retirement specialists can guide you where needed.

There’s a range of support available externally for looking ahead to later life. If you’ve already been thinking of how this may impact you, it’s a good idea to assess your financial situation.

Although there is government support provided by local authorities for considerations such as long term care, if you have assets or income above certain limits, then you may not qualify for support and would need to look for ways to fund such care yourself.

This isn’t an area we specifically provide advice on, however if you are considering your situation in relation to long term care or other later life needs, here are a few useful links to some independent organisations that may be able to help.

Help is at hand – contact our retirement specialists who are expertly placed to guide you through the complexities, be your very own sounding board to ensure that you receive the right level of support to manage your wealth for years to come.

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Articles and helpful guides

Take a look at our library of helpful articles, guides and videos to help guide you through the planning process

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