I don’t know about you, but it is rare for me to embark on a long journey without some sort of planning ahead. Whether it’s programming the Sat Nav, or pre-booking airport parking, a little bit of planning generally saves me a lot of unnecessary stress and helps me to reach my destination on time.
"With retirement, the sooner you start planning the greater chance you have of retiring comfortably and when you want."
Most of us are good at this type of planning: whether it’s buying the Christmas turkey or booking an excursion on holiday, we all understand the importance of thinking ahead. So why is that we shirk away from planning our futures? Filling our diaries with exciting adventures or even plotting out a mundane car journey are all important, but have you overlooked the most important planning you should be doing?
At Efficient Portfolio we meet a great deal of people who have pensions; some even have existing advisers. Even with that, time and time again, these same people ask us the same question: ‘Will I have enough money?’ That’s because knowing whether you are on track to have enough money to last the rest of your life needs a different type of approach.
Over the last two decades, we have seen a steady rise in life expectancy, and nowadays 1 in 3 of us can expect to live until we are 100 years old. This coupled with the increasing concerns over the decline in State Pension Benefit do not paint a pretty picture. At this rate, if you have to rely solely on the State, you could end up with too much life at the end of your money.
Retirement planning can help you in many ways: from providing you with sufficient income for life, to helping you reduce the amount of tax you pay. Sound estate planning can also mean that you are able to provide your loved ones with a legacy, whilst still being able to make the most out of your retirement and fill it with all of the things you love. But, for me, the most powerful element of retirement planning is gaining clarity, confidence and certainty over your future, so you can look toward it with excitement and hope, not fear and regret.
It's important to remember that retirement can be an incredibly exciting time of your life, filled with exotic adventures abroad, creating fond memories with your loved ones, and, most importantly, doing exactly what you want when you want. But if you don’t plan ahead, it is unlikely that you are going to be able to realise these wonderful ideals, and instead end up working well into your later life, just to make ends meet.