Retirement planning is more than a one-off event. Here’s why

The idea of creating a retirement plan can in itself be misleading.

Indeed, over the course of your life, it’s likely you’ll end up making various retirement plans – not because of indecision, but because your goals will naturally change along with your personal circumstances.

By design, a financial plan is flexible and adaptive. So, when something unplanned changes your expectations for the future, your plan should work with you to accommodate this shift.

Keep reading to learn why you might need to rethink your retirement goals, and how your financial planner helps keep you and your plan in tune, no matter what stage of life you’re in.

Your retirement objectives are constantly evolving

You aren’t born knowing how you want to spend your retirement. These objectives are pieced together over time and can change throughout your life.

When you are younger, retirement might seem a distant prospect; you might only think of it in terms of:

• Establishing an ideal retirement age
• Creating a savings goal
• Eliminating debt.

However, as you get older, the prospect of retirement becomes more tangible. Your plan might become more comprehensive, covering:

• Whether you’ll phase into retirement
• Your ideal lifestyle, including holidays, hobbies, and dining out
• What legacy you’ll leave behind.

Your objectives will constantly shift throughout your life. As such, it’s important that your plan evolves; even reducing your retirement age by a single year can have a knock-on effect on your pension wealth and lifestyle.

A financial planner ensures that your plan is harmonised with your shifting objectives through regular reviews and check-ins. These can help you identify whether your retirement mindset has changed, how that could impact your plan, and what your next steps should be.

Unexpected events can rapidly change your situation

Life is full of unexpected twists and turns, both good and bad.

A good surprise could be a new job significantly increasing your income, or your family tree growing new branches. An unwelcome event might be a life-changing accident or illness that prevents you from working.

These and similar events could spring up during the course of your life, with a direct or indirect impact on your retirement plan:

• If your income increases, you’ll need to decide how it impacts your objectives: do you move up your retirement, or do you opt for a more luxurious retirement lifestyle?
• If your family grows, it may change how you distribute your assets among your beneficiaries.
• If you have a life-changing accident or illness, you may need to adjust your objectives based on additional costs you might incur, such as for care (note that a financial planner can help you implement a variety of protections to keep your plan on track).

Your Kellands financial planner can make you aware of how a new circumstance will impact your plan, and tailor solutions to help you profit from it or minimise its disruption.

Macroeconomic forces may gradually erode the value of your wealth

When we speak of macroeconomic forces, we mean:

• Inflation – rising inflation causes everyday costs to rise
• Market volatility or crashes – investments, like your pension, suddenly rise or fall in value
• Interest rates – lower rates can make annuities more expensive, while higher rates can mean bond values decline, impacting your overall investment return
• Changing tax rules – future governments could introduce new rules that impact your retirement objectives, like higher taxes.

These elements (alongside others) can work against you as you build your retirement fund to achieve your goals.

They can also impact your wealth in retirement: cost-of-living increases or more stringent taxes mean you may be left with less wealth to enjoy.

Macroeconomic trends are unpredictable, but you may need to make changes to keep your objectives on track.

There’s no guarantee you will be negatively affected. But your financial planner will be there if you are, helping you rebalance your portfolio in response to market shifts, or counterbalancing your wealth against new restrictive tax rules.

Get in touch

Your retirement plan is a long-term strategy. The earlier you start, the more time you’ll have to smooth out any bumps along the way.

Whatever happens, we help you prepare for the bad and adapt to the good, so your plan is always in harmony with your dream retirement.

Find out more about how our award-winning team can help by emailing us at hale@kelland.co.uk, or call 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

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