Updated 25 January 2017
Jason Witcombe offers up his best guidance for individuals approaching retirement and reassures individuals that with careful planning one can often retire sooner than first thought.
1. What’s the best advice you would give someone who is approaching retirement?
To look at your finances as a whole rather than solely focusing on pensions. That way you can create a structured plan across all assets. Retirement doesn’t have to be a clean break from work and many people would benefit both financially and mentally from a gradual retirement.
2. How should one decide when to retire?
You need to work out whether you can afford to and then if you want to. We use a modelling system that looks at assets, liabilities, income and expenditure and stress tests these against scenarios like high inflation or low investment returns. It brings the numbers to life a bit more.
3. What would you advise someone who is considering retiring before the State Pension age?
To remember that this is just an arbitrary age set by the government, so don’t worry. Many people will retire at State Pension Age or their pension scheme’s “Normal Retirement Date” without it crossing their mind that they could have retired sooner. Take control.
4. What is the most common question you get asked from someone who is approaching retirement?
“Have I got enough money?” Many people I meet have more than enough money to retire on but don’t realise it. It’s that reassurance that we can provide. Conversely, some can’t afford to retire without cutting expenditure or downsizing and need to be helped to understand this.
5. What is the most common financial mistake you find individuals make when they are approaching retirement?
Not taking time to understand their choices. Far too many people just tick a box on a pension provider’s annuity form without shopping around. An ill thought out decision at retirement could haunt you for the rest of your life. Invest some time, money and effort into making the right decision.