Planning for retirement is a source of stress for many people. When thinking ahead to your future there are multiple unknowns: How much money do I need to save? When will I be able to retire? How do I track down old pensions?
One or all these worries may be keeping you awake at night.
Recent research from Standard Life found that 1 in 5 people have lost sleep worrying about their retirement. However, planning for retirement needn’t impact your sleep.
Seeking support from a financial planner is one way that you could reduce the stress associated with retirement planning. We can help you to make informed decisions to feel confident about your pension and provide reassurance that you’re not missing out on any potential tax savings or smart investment strategies.
Despite this, 62% of people suffering from negative effects associated with retirement planning have not sought support.
With World Sleep Day approaching on 15 March, and since a good night’s sleep is an essential part of a healthy lifestyle, read on to discover how working with us could help you plan for retirement – and enjoy a better night's sleep.
1. A financial planner can give you confidence about how much money you may need in retirement
One major source of worry you may have when thinking about your retirement is not knowing how much money you need to save.
If the size of your pension pot is keeping you awake at night, you’re not alone. In fact, a recent study from Aegon found that 45% of people are worried about running out of money in retirement.
Fortunately, we could help you mitigate these concerns by calculating how much you need to save to afford the retirement you want. We can predict how much you might need to accrue in your pension by looking at your lifestyle goals such as travel, hobbies, and living location.
Eliminating uncertainty from your financial life can be an effective way to reduce stress. As psychologist Ema Tanovic told the BBC: “Uncertainty can intensify how threatening a situation feels.”
Discussing your future plans with us could help you gain more certainty around your retirement, leading to fewer sleepless nights.
2. A financial planner can help you decide when to retire
A financial planner can use cashflow modelling to simulate your future finances, and help you to decide when an optimal time to retire for you might be.
Factors that could influence when you might be able to retire include:
- How much you need to save
- Your age
- Your income
- Your current pension value.
Using this data, the software will help you visualise your financial future. With these figures and anticipated future information, a planner can then apply their expertise and knowledge to interpret your predicted finances to provide an age when you could expect to retire.
Having a realistic target retirement age in mind can give you something to work towards, keeping you more disciplined when it comes to saving for your financial retirement goals.
It can also give you something to look forward to, making you feel happier and more optimistic, so you can sleep more soundly.
3. Understand your options when it comes to your pension
Depending on where you live, you may be able to access your pension in a number of ways.
Working alongside a financial planner can help you plan a tax-efficient strategy for withdrawing from your pension and meet your retirement goals.
For example, if you are planning to enjoy a trip of a lifetime when you retire, withdrawing a large lump sum could enable you to do this. However, there may be tax implications to such a withdrawal. Speaking to a financial planner ahead of time could help ensure you don’t incur any unnecessary tax bills.
Your pension pot will also need to fund your living expenses in retirement. So, as well as planning for the big-ticket items, we can also help you create a long-term, tax-efficient, and sustainable income throughout your retirement.
With an income plan in place, you can be confident about the lifestyle you may be able to enjoy in retirement – which should help you get a better night’s sleep.
4. A financial planner can help you track down all of your pensions
HR Magazine reports that the average UK worker has £28,000 in unclaimed pension – that’s enough to keep anyone awake at night.
This can often occur because people lose track of pensions from past employers, and don’t know how to track them down.
One way to track down an unclaimed pension is to use the government’s pension tracing service, a free online service which assists you in finding contact details for old pension schemes.
However, you may find it easier with expert help. A professional planner could also explain if it may be advantageous to consolidate your pensions, which can have several potential benefits, including:
- Reduced paperwork
- Lower fees
- Possible improved performance and better returns
- Increased flexibility in how you can access your pension.
Read more: Pros and cons of combining your pension pots. Is it the best move for you?
Get in touch
To start enjoying better sleep, get in touch today.
With extensive experience in advising clients about retirement planning, we’re here to support you in your transition from work to retirement. We’ll assess your assets and the steps you’re currently taking. We’ll also take the time to understand what your priorities are and what your dream retirement looks like.
So, if you’d like help to create a financial plan to structure a tax-efficient income in retirement, please get in touch.
Email enquiries@alexanderpeter.com or give us a call on +44 1689 493455.
Please Note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.
The Financial Conduct Authority does not regulate cashflow planning.
