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Planning for retirement
Planning for retirement can take many forms. It could be using the traditional pension products. It could also be using a combination of assets to form a retirement plan such as ISA, property or your business. When we start to work with a client we take a holistic approach. This means that as independent advisers we consider the wider picture rather than just focusing on a pension product.
Taking a holistic approach, we build a picture of your entire finances at present. We also build a picture of what financial resources you will need at retirement. We need you to think about ideal retirement ages? What will you want to be doing in retirement? Where will you ideally want to live? How much will all this cost?
Our younger clients may find this harder to picture than our clients who are closer to retirement. We can help you with this. Some objectives will be more specific than others. Once we have an objective, we help you with a cash flow forecast.
A cash flow plan will help us see how realistic your objectives are. Do we need to amend the target retirement age to give you more time to secure the funds required to fulfil your objective? Do we need to invest more to meet the objectives? Do we need to lower expectations? Or are we on course for the dream retirement! Through the use of the cash flow planning software we can answer all these questions for you. We then use this as the focus of our annual review with our clients. We can see how investments have performed and make further recommendations to ensure you are on track. If we need to build or catch up on investing to achieve your objective the annual review provides opportunity to do this.
Once we have a plan as Independent Financial Adviser we will help you search the market for the best solutions to fulfil this plan.
To start we find a home for your investments. Do you like or prefer providers that have a strong brand presence and track record? Or would you prefer a newer provider that offers greater technology, easier reporting and monitoring and greater investment choice?
Once we have found a home, we then look for an investment strategy. This falls into two main types, Passive Investing or Active Management. There are others we cover with you at our initial meeting.
Passive investing follows the markets. If the markets go up then your investment follows. If the market goes down your investment follows. You will never get back more than the market. The big positive to this type of investing is cost. Passive investments are the cheapest way to invest.
Active Management is when you instruct a human being or team of human beings to make discretionary decisions for you to try and outperform the market. They will move your funds away from areas of perceived risk and towards areas of perceived opportunity. Paying humans over having your money managed via a computer model (Passive) is more costly. We work with providers who have demonstrated over a period of time that they justify these extra costs with their returns. These returns can not be guaranteed in the future, so we review our recommendations with you annually and recommend changes if we are concerned with performance.
Once we have a home and investment strategy in mind the final element is how much investment risk should be taken? Investment risk factors in your comfort level or appetite for risk. We also make recommendation considering the length of time towards your retirement, your need or lack of need to take risk and your ability to with stand losses in the event of a serious market downturn. We spend a lot of time talking about this to get it right for you so you are not kept awake at night worrying about your investments.
Many people see pensions as complicated and we understand this. We take pride in explaining products and plans in plain English.
If you are just starting to plan or if you are close to retirement with many plans to comprehend and understand we can help. The first step is a free initial consultation to better understand your needs and tell you more about the service we provide.
Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets beyond our control. Investments and the income from them may go down as well as up and you may get back less than the amount invested. Past performance is not a guide to future performance.