Retirement Planning
Planning a retirement without compromise.
What is retirement planning?
Retirement planning is the process of forecasting your financial future based on when you want to have retired by, where you will retire to and how you want your lifestyle in retirement to be.
It involves calculating how much you’ll need to have saved by retirement then crafting a plan of what you need to do differently today and leading up to retirement to reach those goals.
What is included in a retirement plan?
A retirement plan will be condensed into simplistic actions for you to take such as:
- Which pension & investment accounts you need to open, close or merge.
- Where to save or invest your money & how much you’ll need to contribute.
- How to invest now & how this will change over time as you approach and later are in retirement.
Depending on your retirement location and where you are tax domiciled, considerations will also need to be made as to:
- The types of investment & pension accounts you should hold.
- What proportion of your retirement funds should be in each.
- The order in which you withdraw an income of each.
Bare in mind, minimising your income taxes in retirement can be in direct conflict with another goal such as reducing your taxable estate for inheritance tax planning. It’s important therefore that you priortise your goals and understand the impact of any changes you make.
Why is retirement planning important?
It is important as it will help you to identify whether you will always have enough to live the lifestyle you’ve envisioned for retirement meaning you won’t:
- Run out of money during retirement.
- Have to make compromises to your standard of living.
- Be forced into retiring later than you originally had planned.
- Have to worry about becoming a burden or meeting rising healthcare costs.
When should I start planning my retirement?
You can start planning your retirement at any time or age but the earlier you start the better.
The earlier you start, the smaller the changes will be that you have to make to your investing and savings habits. This is due to compounding effect of investments over time.
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