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RETIREMENT REVIEW

L
Lucy Huntington

This document provides information about the importance of retirement planning and conducting a retirement review. It stresses that planning ahead is crucial to ensure retirees can afford their desired lifestyle. A retirement review involves assessing a person's needs, objectives, current pensions and policies to understand what income they are projected to receive and if there are any gaps. It aims to help people position themselves best for retirement rules and afford their plans. The document dispels some common myths about retirement planning, such as relying solely on the state pension, treating a business or home as a pension, or believing it is too late to plan. It emphasizes taking advice from financial experts to understand retirement options and make the most of pension plans.

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YOUR RETIREMENT REVIEW
THE IMPORTANCE OF YOUR REVIEW We cant stress enough how important it is to plan ahead for your retirement. In your first meeting, well prompt your thoughts When will you stop working? Will you go part time? How old will your children be? Where will you live? How will you fill your time? What are you grand plans? When will your state pension be due and how much will you get? What will your spouse receive? Have you saved enough? What is your essential expenditure? What are you on track for now? What are the benefits and drawbacks to your current pension plans? How much tax will you pay? What can you leave behind and how will it be taxed? Can you afford the lifestyle you desire? How do your other financial plans and policies integrate? For some, even thinking about pension planning seems boring, for others its too far away to even think about. It may feel that way now but we promise it wont when you near your desired retirement age, or start dreaming of what youd like to do when you finally quit work for good! Some of your questions we can help with
Any financial adviser will admit that the hardest conversation to have with a new client comes when we audit their pensions and find that they need to make serious cutbacks or cancel their grand plans for retirement. This often affects the first few years of retirement when big plans involving big expenditure is high on our clients retirement to do list. For most, retirement cant come quick enough, but can you really afford to retire at the age you desire? Even if youre of the mindset that Ill work til Im dead but.. have you thought of a backup plan just in case things dont work out? The typical age a new client enquires about his/her retirement is fifty, with a mortgage, teenage children and a desire to retire within 10 years. Unfortunately, most have no idea where their pensions are, what they are worth or how much income they may generate and when. Most dont know how much they are entitled to from the state, when they can draw it or how it actually works. What is a retirement review? A retirement review will involve a meeting with one of our retirement experts to explore your financial planning. We will assess your needs and objectives along with reviewing the policies you have in place. We will help you to understand the planning you already have, what you need from your pensions and how you will achieve Guardian Wealth Management are specialists in pension and retirement planning. We help clients arrange their affairs to best position themselves for their future, and support them along the way. We are here for you up to and throughout your retirement.
GIVE YOURSELF OPTIONS The longer you wait to plan, the less time you have
Why take advice? Do you understand your pension statements? Do you know how your pensions work and how this affects your options? Do you know what retirement income youre on track for? Is there a gap between when you want to retire and when youll get your state pension? Do you know the taxes associated with your pension and how this may change depending on where you live? Do you understand the new pension legislation, are you keeping your plans up to date to position yourself best for the new rules? Are you within annual and lifetime limits? Do you monitor the performance within your plans? If occupational, do you know the financial strength of your pensions underlying structure? Do you understand what will happen to your pension when you die or who can or will benefit? Are you retiring offshore? Will you move around? Do you have concerns over currency exchange fluctuations? Have you accounted for the potential inflation rates in your country of residence? Whats the difference between a private pension and my final salary plan? A final salary plan is structured in advance, the benefits are pre-defined and rigid. While this sort of policy is structured and secure, it cannot adapt to your changing circumstances and requirements. For some, an increasing income for life is most appealing, but there is more to consider UK taxation, deducted at source from your final salary income Death benefits The schemes funding status Flexibility over income The need for lump sums for one-off purchases The potential for investment growth beyond inflationary increases Control over investments and costs The ability to structure your own income benefits, you may want a higher income early in retirement to do all the things you dreamed of, rather than finding yourself with a lovely big pension income when youre in your 80s.
DISPELL THE MYTHS Its too late? Its not! Even those who have already stopped working may find it useful to take stock of their pension plans and find out how to make them work for the best now, and for the future.
You cant trust pensions! Private pension plans are simply savings schemes treated differently by law, offering additional benefits and tax efficiency whilst keeping to certain rules and limits. The only reason you may have heard a bad news story about private pensions will likely be related to poor investment performance. When we review your pensions we concentrate on two key areas; ensuring your investment strategy is fitting to your circumstances and attitude to investment risk then, reviewing the costs within your pension to ensure you arent paying too much (This can itself inhibit growth). I cant afford to save The trick to retirement planning is to start saving as soon as possible. A fund with 40 years to grow is more beneficial than one you create the year before you retire with no time to grow. Save what you can as soon as you can. The state will provide for me, Ive paid taxes all my life The state pension is a popular toy for politicians, these days it is most commonly used for government spending cuts. It is only within the last few years that womens state pension has moved from 60 to 68 years. In addition, the required number of years national insurance contribution (NIC) has shifted from 30 to 35 years. While the flat rate pension has been much-talked about as a benefit, it is not as simple as you would first think; there are many complex adjustments according to your NICs contributions over the years. It is highly likely that such a large cost to the government will be cut further as recent rumours include making state pensions means tested and reducing the annual inflationary increase. My business is my pension This is a common but dangerous statement. Even those with the most successful business, the most brilliant successors and the perfect partners can find themselves in turmoil at retirement. Will you sell? Will you continue to claim dividends? Will you remain a decision maker or depend on the strategy of new owners? How will you extract your cash? By adding a proper retirement plan to your portfolio, you will be providing yourself with a backbone to your retirement, even if your business will supplement this. Talk to us about some of the ways pensions can support and protect your business and its assets. Did you realise that many private pensions can purchase a commercial property? This could allow your business to sell the property to your pension plan, meaning it collects rent from your business and grows in value, while protecting the property from creditors ensuring your financial security My house is my pension, Ill downsize at retirement It seems strange that many rely on releasing funds from their property in order to fund their retirement. You may justify it in your mind that the children have left and you dont really need all that space, but would you really want to get rid of something youve worked for all your life? Chances are you will have developed and cherished your home, so why should you abandon it when you finally have the time to enjoy it? The property market can be fickle, its hard to rely on one single asset to supplement your income, perhaps downsizing should be a consideration if your health deteriorates and you struggle with the upkeep. For your first ten years of retirement when youre still fit and active, you surely should enjoy the fruits of your labour.
Information correct as of 8th May 2014. The information provided is for guidance only and advice should be sought before making any financial decisions. Guardian Wealth Management Ltd cannot be held responsible for any errors or omissions which result in financial loss. General Enquiries +44 800 779 7028 Switzerland +41 22 710 7864 Dubai +971 4450 9700 Hong Kong +852 3796 3555 Qatar +974 4491 5355 United Kingdom +44 1302 703 2128

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RETIREMENT REVIEW

  • 2. THE IMPORTANCE OF YOUR REVIEW We cant stress enough how important it is to plan ahead for your retirement. In your first meeting, well prompt your thoughts When will you stop working? Will you go part time? How old will your children be? Where will you live? How will you fill your time? What are you grand plans? When will your state pension be due and how much will you get? What will your spouse receive? Have you saved enough? What is your essential expenditure? What are you on track for now? What are the benefits and drawbacks to your current pension plans? How much tax will you pay? What can you leave behind and how will it be taxed? Can you afford the lifestyle you desire? How do your other financial plans and policies integrate? For some, even thinking about pension planning seems boring, for others its too far away to even think about. It may feel that way now but we promise it wont when you near your desired retirement age, or start dreaming of what youd like to do when you finally quit work for good! Some of your questions we can help with
  • 3. Any financial adviser will admit that the hardest conversation to have with a new client comes when we audit their pensions and find that they need to make serious cutbacks or cancel their grand plans for retirement. This often affects the first few years of retirement when big plans involving big expenditure is high on our clients retirement to do list. For most, retirement cant come quick enough, but can you really afford to retire at the age you desire? Even if youre of the mindset that Ill work til Im dead but.. have you thought of a backup plan just in case things dont work out? The typical age a new client enquires about his/her retirement is fifty, with a mortgage, teenage children and a desire to retire within 10 years. Unfortunately, most have no idea where their pensions are, what they are worth or how much income they may generate and when. Most dont know how much they are entitled to from the state, when they can draw it or how it actually works. What is a retirement review? A retirement review will involve a meeting with one of our retirement experts to explore your financial planning. We will assess your needs and objectives along with reviewing the policies you have in place. We will help you to understand the planning you already have, what you need from your pensions and how you will achieve Guardian Wealth Management are specialists in pension and retirement planning. We help clients arrange their affairs to best position themselves for their future, and support them along the way. We are here for you up to and throughout your retirement.
  • 4. GIVE YOURSELF OPTIONS The longer you wait to plan, the less time you have
  • 5. Why take advice? Do you understand your pension statements? Do you know how your pensions work and how this affects your options? Do you know what retirement income youre on track for? Is there a gap between when you want to retire and when youll get your state pension? Do you know the taxes associated with your pension and how this may change depending on where you live? Do you understand the new pension legislation, are you keeping your plans up to date to position yourself best for the new rules? Are you within annual and lifetime limits? Do you monitor the performance within your plans? If occupational, do you know the financial strength of your pensions underlying structure? Do you understand what will happen to your pension when you die or who can or will benefit? Are you retiring offshore? Will you move around? Do you have concerns over currency exchange fluctuations? Have you accounted for the potential inflation rates in your country of residence? Whats the difference between a private pension and my final salary plan? A final salary plan is structured in advance, the benefits are pre-defined and rigid. While this sort of policy is structured and secure, it cannot adapt to your changing circumstances and requirements. For some, an increasing income for life is most appealing, but there is more to consider UK taxation, deducted at source from your final salary income Death benefits The schemes funding status Flexibility over income The need for lump sums for one-off purchases The potential for investment growth beyond inflationary increases Control over investments and costs The ability to structure your own income benefits, you may want a higher income early in retirement to do all the things you dreamed of, rather than finding yourself with a lovely big pension income when youre in your 80s.
  • 6. DISPELL THE MYTHS Its too late? Its not! Even those who have already stopped working may find it useful to take stock of their pension plans and find out how to make them work for the best now, and for the future.
  • 7. You cant trust pensions! Private pension plans are simply savings schemes treated differently by law, offering additional benefits and tax efficiency whilst keeping to certain rules and limits. The only reason you may have heard a bad news story about private pensions will likely be related to poor investment performance. When we review your pensions we concentrate on two key areas; ensuring your investment strategy is fitting to your circumstances and attitude to investment risk then, reviewing the costs within your pension to ensure you arent paying too much (This can itself inhibit growth). I cant afford to save The trick to retirement planning is to start saving as soon as possible. A fund with 40 years to grow is more beneficial than one you create the year before you retire with no time to grow. Save what you can as soon as you can. The state will provide for me, Ive paid taxes all my life The state pension is a popular toy for politicians, these days it is most commonly used for government spending cuts. It is only within the last few years that womens state pension has moved from 60 to 68 years. In addition, the required number of years national insurance contribution (NIC) has shifted from 30 to 35 years. While the flat rate pension has been much-talked about as a benefit, it is not as simple as you would first think; there are many complex adjustments according to your NICs contributions over the years. It is highly likely that such a large cost to the government will be cut further as recent rumours include making state pensions means tested and reducing the annual inflationary increase. My business is my pension This is a common but dangerous statement. Even those with the most successful business, the most brilliant successors and the perfect partners can find themselves in turmoil at retirement. Will you sell? Will you continue to claim dividends? Will you remain a decision maker or depend on the strategy of new owners? How will you extract your cash? By adding a proper retirement plan to your portfolio, you will be providing yourself with a backbone to your retirement, even if your business will supplement this. Talk to us about some of the ways pensions can support and protect your business and its assets. Did you realise that many private pensions can purchase a commercial property? This could allow your business to sell the property to your pension plan, meaning it collects rent from your business and grows in value, while protecting the property from creditors ensuring your financial security My house is my pension, Ill downsize at retirement It seems strange that many rely on releasing funds from their property in order to fund their retirement. You may justify it in your mind that the children have left and you dont really need all that space, but would you really want to get rid of something youve worked for all your life? Chances are you will have developed and cherished your home, so why should you abandon it when you finally have the time to enjoy it? The property market can be fickle, its hard to rely on one single asset to supplement your income, perhaps downsizing should be a consideration if your health deteriorates and you struggle with the upkeep. For your first ten years of retirement when youre still fit and active, you surely should enjoy the fruits of your labour.
  • 8. Information correct as of 8th May 2014. The information provided is for guidance only and advice should be sought before making any financial decisions. Guardian Wealth Management Ltd cannot be held responsible for any errors or omissions which result in financial loss. General Enquiries +44 800 779 7028 Switzerland +41 22 710 7864 Dubai +971 4450 9700 Hong Kong +852 3796 3555 Qatar +974 4491 5355 United Kingdom +44 1302 703 2128