Retirement planning
Here's a summary of what we discussed at Saturday's Money Brunch, at St. James's Place!
“I’m struggling to determine how much I need for retirement.’
“I’m OK with not being able to ever retire fully, but I don’t want to keep grinding forever.”
“I know I can’t keep operating on an “income from wages only’ basis.”
Do any (or all) of these resonate with you? 🙋🏽♀️
36 hours earlier, we didn’t have a venue for this month’s event.
And then, Mimi Gom (who I know through the Hive Founders network), suggested we do this event together. And truly saved the day!
The theme was going to be retirement, so it was fortuitous that we had someone in our midst for whom retirement planning is a big part of their day-to-day.
Here are some of the key takeaways.
Pensions
Know what your State Pension is going to look like
Check your State Pension forecast here
This will tell you how much State Pension you could get, when you can get it - and how to increase it, if you can
Know where your other pension pots are - and consolidate them
You don’t want too many pension pots, as it will make life really difficult when it comes to accessing this money
But check the terms of your pensions before consolidating them - you might have an instance where one allows you to take 40% tax-free, versus the standard 25%, so you wouldn’t want to close that one!
Mimi rates Aviva, Standard Life and Scottish Widows highly for their customer service and ease of use when drawing down pension money, so that’s something to keep in mind
Check where your pension money is being invested
Make sure you’re happy with the funds (the rule of thumb is to invest in higher-risk funds when you’re younger, and then reduce this risk over time)
If ethics are important to you, you can also opt for more ethical options
Life planning
Compromise and gratitude are key
Very few people have it all
Be prepared to compromise on things, to determine what your post-retirement life is going to cost you
Consider:
What’s the alternative if you can’t get the ’best’?
Comparisons with the Boomer generation is going to get you nowhere (after all, comparison is the thief of joy)
How can you measure happiness if it’s not by the cost of things? Gratitude is essential
Be prepared for your priorities to change
I used to love going out and seeing friends, and travelling loads. Now I love working, going to the gym and sleeping! 😎
As Money Bruncher Veshali put it, ‘You change as you grow’
In your 50s and 60s, expenditure is likely to drop, as you will have everything you need - this is something that might be hard to wrap your head around now, which is why later-life planning is so tricky to do
Your decisions will vary depending on your stage in life
In your early and mid-career, you may want to max out your ISA allowance each year
Once that’s filled, try to pay more into your pension pots, by opening up a private pension or SIPP
In your later career, around the 50 age mark, you may want to direct more effort towards your pension pots
If you’re a higher rate taxpayer, and you’ve maxed out ISA and pensions, you can invest in venture capital trusts (VCTs) and get tax relief
If you’re wanting to invest in property to generate rental income, don’t do it alone - do it with someone you trust, and try to avoid spending thousands of pounds on a property mentor/coach (that money can be used towards your investments instead!)
If you’re investing in crypto, remember it’s unregulated - but still taxable
Remember, this is just a summary of our discussion. This is all subjective - and in no way constitutes financial advice.
Join us at the next Money Brunch on Saturday 23 March! Sign up here.