Have you got a retirement plan?

The key to a robust retirement is having a good idea of the plans that you have for when you reach your chosen age. To keep up your lifestyle in your golden years you need to be sure of your pension and financial situation.

In this podcast episode I share some of the pitfalls of adopting a ‘Do It Yourself’ approach.

If you would prefer to read about it, there’s also a transcript below.


This week we look at developing a robust retirement plan, and key to this is having a good idea of the lifestyle that you want in retirement.

People who are planning for retirement should think hard about what they actually want to do when they eventually stop work. It is helpful to have a good idea of the lifestyle you want, how much it will cost and how you’re going to pay for it.

There’s so much going on in your life from family and work to pursuing your passions.

Retirement planning may not have been your priority, but now you want to make sure your pension and overall financial situation will allow you to keep up your current lifestyle and enjoy your golden years.

The more enthusiastic you are about retiring the more likely you are to develop a robust retirement plan.

Obtaining professional financial advice is key to ensuring you achieve the retirement that you want.

But 8 million people are planning a do it yourself approach to retirement, and many don’t know how to avoid, running out of money, or avoiding a big tax bill or how to leave money to loved ones.

Millions of people don’t understand their retirement options when they stop work.

More than a third of pension holders admit they know nothing about the product options at retirement, and the pros and cons of each option.

And more than 1 in 5 of those planning to retire in the next 5 years, know nothing about the product options at retirement. And they didn’t understand some of the big risks in retirement.

impact of stock market falls

And worryingly, 35% of pension holders know nothing about how stock market falls can affect retirement savings.

Of those surveyed:

  • 34% commented they don’t know how to ensure that they will not run the money in retirement.
  • Half of the people with a pension of over £100,000 didn’t know a good amount about how to take money from their pension in a tax efficient way.
  • 34% of my people understand how to ensure their spouse will be left with enough pension if they die.
  • Although people are unclear about their options, many are not considering taking professional advice.
  • Only 39% of pension holders are planning on taking financial advice when they retire.
  • 31% are planning a do it yourself retirement.
  • Only half of mass affluent people, that is, those with assets of between £100,000 and £500,000 (excluding property) are planning to take professional financial advice.

I find this staggering because the implications of getting this wrong is massive.

The top occasions where mass affluent consumers feel that people should seek professional advice are choosing to invest a large lump sum, or inheritance tax planning and deciding how to access a pension.

People have a series of big decisions to make as they approach the end of their working life and each one can make a huge difference to their retirement. For example,

Should you draw your pension down in one go or over a period of time?

Should you take your 25% tax-free cash or leave the money in your pension to grow?

Should you buy an annuity to guarantee an income for the rest of your life or go for drawdown?

These are just a few of the questions your professional financial advisor will be able to help you with.

Obtaining advice compensates for the emotional biases people have when they make big financial decisions. A do it yourself approach to managing large pension funds at retirement is fraught with risk.

People can easily buy the wrong products, incur unnecessary tax bills, or simply exhaust retirement funds too quickly.

Whereas an advisor will provide an impartial cool-headed approach to their clients finances and offer solutions that the client will not even have considered.

Get In Touch

If you would like to help developing your retirement plan, get started with a free 30 minute call:

Other related articles:

Will You Have Enough Money To Pay For Your Ideal Retirement Lifestyle?

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