Forget the Easter Eggs; Worry about Your Nest Egg
This year (2020) the usual excitement for the Easter break has been replaced with a global feeling of uncertainty, confusion and distress. Covid-19 not only signals a protracted period of fear over our health, but it has also sent potentially catastrophic shockwaves through the economy. Businesses are shutting up shop, staff are being furloughed for unspecified periods and markets have seen their worst performance since World War II. The average person is now terrified of their financial security, both in their day-to-day spending and for their futures.
During this dark period of our lives, you don’t need me to tell you that Easter eggs are certainly the last thing on any of our minds; however, I fervently believe that nest-eggs should be our top priority.
"Without a nest-egg for the future, you could face uncertainty or financial difficulty, so it’s important to start saving now."
Times of crisis are a stark reminder that financial planning should be on everyone’s agenda. Money can be the root of worry, but it can also be your ticket to security. There are millions of people on the planet right now who wished they had some sort of nest-egg to fall back on, but sadly their lack of planning is now compounding their feelings of trepidation. But surely it’s too late?
Before we would encourage anyone to invest for their future, we almost insist that they firstly build up an emergency fund, which is usually 3 times their monthly income. Having a pot of money to fall back on during tough times, such as in the midst of a global pandemic, will bring some much needed comfort: you will be able to pay your bills, put food on the table and not have sleepless nights fretting over your financial situation. Trust me, it’s never too late to start putting something aside, even if it’s just enough to tide you over. The habit of doing this is often regarded as being more important than the actual amount you save, so I urge you to start putting something away now, despite how tough that may feel. Your future self will be grateful.
But aside from covering your day-to-day expenses and necessities, by not building a nest-egg, you could be putting your future security in jeopardy. On average, pensioners who retired in the last 2 years had a total of £61,897 in their pension pots. That might sound like a nice sum, but in reality that equates to just £2,500 a year, and even if you add the State Pension, you’ll still be below the current minimum wage. Retirement dreams of cruise ships and golden beaches are rapidly being replaced with desolate and depressing nightmares.
Just like the habit of putting something away for a rainy day, planning around your future is crucial. Unless you want to be working well into your eighties and having to rely on the State Pension, which may no longer be available at the point you retire, you must start planning now.
There are numerous solutions and opportunities available to help you build your nest-egg in a tax-efficient and flexible way, which meets your needs and tolerances to risk. However, whether you use pensions, ISAs or more sophisticated investments, retirement planning can be a little confusing at times, so speaking to an Independent Financial Planner will help to ensure that you are using the best tools for your situation. Their expertise and guidance could also save you money in the long-term and take away the feeling of stress that you may experience if you go it alone.
Frankly, it is never too late to start planning for your future and putting in place a safety net to protect your security. And, let’s face it, a huge proportion of us have now been gifted with additional time to finally start ticking off all of that outstanding ‘life admin’ that we’ve put on hold, so now is the perfect time to get your house in order and start looking forward to your future. Better times are on the horizon, so make sure that you have a prime spot from which to watch the sun rise again.
If you would like to speak to one of our Chartered Financial Planners, we are delighted to be able to offer you a free introductory call and are set-up to conduct our meetings via video-call (a tool that has been incredibly beneficial in the last few weeks). Please don’t worry about your finances in silence; there is plenty you can do today for your future, so please get in touch on 01572 898060 or email [email protected]
We also have a great online resource called ‘The 2 Minute Retirement Plan’ which will help you to quickly assess what you can expect from your existing plans. To use this, please press here.
Stay safe, stay healthy and use this time to get those plans in motion.