Reservations: ‘We had always thought that financial advisers just wanted to sell something!’02 June 2021
The life junction of retirement that loomed large for one couple had arrived a few years early, with both being made redundant in their mid-fifties and financial decisions to be made about how to allocate redundancy funds, and also how to draw pension benefits to replace lost income.
They had maintained some reservations about contacting a financial adviser about the best ways to use their funds and pension income, noting, 'we had always thought that financial advisers just wanted to sell something!'. As we note on our website, we treat each client individually, and we do not need to sell a product or investment to provide advice. And in this client's enquiry, the need for good financial planning advice was clear, and no new product or investment was required.
Having not taken advice before, the financial decisions ahead of the clients were paramount, but also somewhat daunting. How much income do they need in retirement, how much cash for their own needs, should they make gifts to the family, how about mortgage repayment – all questions in the planning mix to be resolved.
Good financial planning also reaches past the financial decisions to other bedrocks of getting a household in order for the future, with hopefully a real release from the work of the last three to four decades. Wills need to be in place and up to date, along with Powers of Attorney, especially for those planning a hectic (and hopefully enjoyable) start to their freedom years. Checking State Pension benefits is also normally recommended, both to check their value for a decade ahead, but also to keep a watchful eye on any shortfalls that might appear if work and national insurance contributions cease a while before State Pension age.
There are many industry articles and comment on real longevity, with the prospect of living to age 90 and beyond a real possibility for those in good health. Living to a 'ripe old age' has accelerated with the wonders of modern medical science; however, some might fairly argue that the corresponding quality of life in the later years may not be what was hoped for. This can bring concerns about the costs of future long-term care, and inflation can erode the real purchasing power of pension benefits for years ahead. Another good reason why making the right future-focused choices when drawing pension benefits can be vital.
A regular review of your retirement strategy with a qualified professional is a great way to make sure that you are doing all you can for a comfortable older age. Checking all future objectives on drawing pension benefits might offer you the protection you need to future proof your plans.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899