3 practical reasons to work with a financial planner as you reach retirement

Over the course of your life, there are few points that bring about as significant a change in circumstances as your eventual retirement.

Your retirement is a chance to do all the things you have dreamed of. Even if it’s a few years away, you probably have some ideas of how you’d like to spend the time – whether that’s to travel, start your own business, or dedicate more time to your passions.

Getting the right advice at the point you retire can be critical if you want to ensure you can live the lifestyle you want.

Despite this, PensionsAge found that 40% of all “decumulation” pension products in 2021 were bought without regulated advice. It’s inevitable that, without professional advice and guidance, some soon-to-be retirees will make decisions they might end up regretting.

Read on to discover three reasons you should work with a financial planner to address any potential issues as you approach your retirement.

1. A financial planner provides emotional support

It is natural to feel a degree of nervousness as your approach your retirement. The decisions you make relating to your savings, investments and pension pot could affect the rest of your life.

A financial planner will work on building a trusted relationship with you, taking the time to understand your circumstances and needs as well as your lifestyle and retirement goals.

We’re here to help you to focus on your ambitions, and to ensure that you can take a sustainable income throughout later life.

Using cashflow modelling software, we can forecast future income and expenditure, giving you the confidence that you can maintain your lifestyle without the risk of running out of money in later life.

We can also help you to manage the transition into later life.

As PensionsAge reports, one of the consequences of retirement that most people don’t plan for is the sudden loss of their work identity and the daily purpose it gives. We can ensure you focus on both the financial and emotional aspects of this next phase, so you can approach it with confidence.

2. A financial planner ensures your money grows as efficiently as possible

Your retirement fund will likely be made up of several income streams including your pension pot, savings, and investments. These funds will need to last you for potentially 20, 30 or even 40 years.

Your savings will need to provide you with enough money to give you the level of comfort you desire during retirement as well as protect you from the ill-effects of inflation or changes in circumstances.

Paying avoidable taxes is one of the quickest ways to shrink the size of your retirement pot. So, we can help you to:

  • Build your wealth tax-efficiently and make the most of the reliefs on offer
  • Withdraw your income in a tax-efficient way so you don’t pay more tax than you should
  • Plan your estate so your loved ones don’t lose 40% of your wealth to Inheritance Tax when you die.

With regard to your pension contributions, we can also help you to tackle issues such as the restrictions of the Annual and Lifetime Allowance and help you to avoid unwanted tax charges.

3. A financial planner can keep you on track

Over time, your circumstances are likely to change. You might start a new job, move home, or you may get married or divorced. All these events can mean your financial plan needs to adapt.

One of the benefits of working with a financial planner is that it will be a long-term relationship. We meet with all clients on at least an annual basis to review your progress towards your goals, and to make any changes that ensure you remain on track to achieve your life goals.

Developing a long-term relationship with a financial planner – rather than taking one-off advice – can also boost your wealth.

A study by the International Longevity Centre (ILC) found that fostering an ongoing relationship with a financial adviser leads to better financial outcomes.

People who received professional financial advice between 2001 and 2006, and were still receiving advice in 2014 to 2016, had nearly 50% higher average pension wealth than those only advised at the start.

Get in touch

One of the main goals of a financial plan is to ensure you reach your desired retirement aims. By working with a financial planner as you approach retirement you can reduce your stress and ensure you are on track for the lifestyle you want to lead.

If you would like to find out more, email [email protected] or call us on 0345 505 3500.

Please note

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.