Some clients who’ve been long looking forward to retirement find it actually turns out to be a bit of a headache.
Not because they don’t enjoy pottering around the garden or playing with their grandchildren … but because their financial affairs are not in proper order.
They haven’t got the strategy in place to make the most of their retirement income, and that means they’re not able to unlock the cash potential that would allow them to take that world cruise, or buy that home in the sun.
As one wit once said, retirement is the longest holiday of your life!
A case in point are a couple I recently advised. My clients were delighted to tell me they had decided to retire at the end of May.
Over the course of their working lives they had built up a number of pension pots, but needed expert guidance about how they could maximise these to generate the most income.
- a deferred final salary occupational pension
- an additional voluntary contribution (AVC) fund
- a free-standing AVC fund
- a stakeholder pension fund
- a personal pension fund
- various equity ISA accounts each bought without any notion of asset allocation and each selected on a whim.
All in all, plenty to provide security in retirement, but lacking a focused plan.
I was able to guide them through all their options by analysing their needs including tolerances to investment risk, requirement for any lump sums, ongoing income needs, survivor benefits and medical history.
We needed to cover what they had felt to be a quite bewildering abundance of alternatives, but my straightforward advice enabled them to make clear choices they were comfortable with.
As a result, they have been able to satisfy their immediate needs and they have the potential to meet their future requirements.
Not a bad cure for a headache!