Retirement planning is about making sure that you have enough money to live on when you retire.
But most people want to thrive and not just survive, so building a retirement fund should be one of life’s major goals.
Let’s be clear, this is not just about pensions, it is about building, storing and preserving wealth for the future.
At Apex CB Financial Planning we offer specialist retirement planning advice. We can help you to identify your goals and we will encourage you to spend time with us building a lifetime cash-flow model. This shows when you will need money and how much, and helps you to work out how much you need to save.
You may have heard about how you can flexibly access a pension in retirement. Our video explains how this works
Planning for retirement?
Pensions are one of the most tax-efficient long-term savings vehicles, but also probably the least well understood. The government offers a number of “tax breaks” to encourage people to save to be self-reliant in retirement:
- Your savings are increased by a rebate of Income Tax (known as “tax relief”)
- If you pay higher rate (40%) tax, or additional rate (45%) tax, you get the higher rate refunded
- You won’t pay any capital gains tax on your investment growth
- When you retire you can take 25% of the fund tax free
- You can draw the rest any time after 55 flexibly, but subject to income tax
- You still have the option to buy a guaranteed income using an annuity
- After your death the rest of the pot can go to your spouse or children
So how much should you aim to save for retirement? We can help you calculate how much you need to live a comfortable and secure future, and then create a plan tailored to what you are able to afford.
But my property/business is my pension?
Some people think that their business will provide a pension in retirement, but what happens if you retire in a recession?
Others buy properties to rent out and create an income stream this way. This works for many people because they understand property and can see the asset there each time they drive past it.
Between 1997 and 2017 property had a long steady period of growth in the UK. However property is subject to cycles just like everything else. Compared with pensions and other savings vehicles, investing in property has other downsides too:
- Every year you need to budget for general maintenance, and every 5-10 years for more major refurbishment
- Buying and selling property costs thousands in fees, and all these costs diminish your profits
- Income from property is taxable the same as other investment income, so you could pay 20%, 40% or even 45% tax on the rent
- The gain (profit) you make on the capital value is taxable too
- Property is notoriously illiquid, meaning that you can’t easily make partial withdrawals, and selling can be a long and expensive process
Do you really want to miss out on the flexibility and tax-efficient savings that pension offer?
As you approach retirement you will have some important and life-changing decisions to make. We take time to discover your needs and help you make the right choices.
Good financial advice is vital at this time to make sure that you achieve the retirement you deserve.