It’s not necessarily something that everyone likes to think about, but planning your finances for later life is very important indeed. If you want to ensure you live a comfortable, happy retirement and that you have something to pass on to future generations, then you need to start thinking about things in advance. So what are the main points you should consider?
Goals
Everyone has different goals when it comes to their money in retirement, and it’s difficult to plan without properly establishing these. What are you looking to achieve? A large inheritance for your children? A solid amount to live on each month? Think about exactly what would make you happy.
Existing Savings
You’ll likely have been paying into a retirement pot for most of your life, and what you decide to do with this is one of the things that will have the largest impact on your financial situation. There are many different products to choose from, including common options like annuities, to more controlled investment plans.
Tax Implications
Calculating tax can be pretty tricky when it comes to financial planning. There are a lot of different exemptions and thresholds for you to be aware of, and they can have a significant impact on your finances. Most people will look to hire some form of advisor for this part, as it can be complex, and it helps to have experts on hand to ensure you get the most out of what you’ve got.
Investments
Guarding against the rate of inflation is important to ensure that all of the money you’re saving away is still just as valuable when it comes to you wanting to use it or pass it down. For this reason, some thought needs to be given to how you’re investing your money – is it with a bank that offers a good rate of interest? Or perhaps you’re hoping to invest in the markets to make even more money? A company such as James Hay will be able to help you work out what your options are.
Circumstances
In order to get where you want to be, you need to fully understand your current circumstances. This might include things like your health, because this can affect insurance and pension plans. It may also include your current job if you aren’t yet retired; could you be earning more or less in the next few years?