Constant checks are key to pensions planning
Any good gardener will tell you that a plant needs regular tending, in order to grow and flourish as it should. The same principle applies to long-term savings for retirement, whether these be direct funds investments, or investments in a personal pension.
With any kind of pension, your money is invested on into a number of investment funds, and the returns from those funds are the ‘pension pot’ you take with you into retirement.
It is crucial to keep tabs on how your funds are doing. This year’s star fund may not meet those expectations in future – and no-one ever remembers who was second in the Derby.
Request pensions advice online or call 0800 678 5929 to speak to an adviser
Investment Funds in Retirement Planning
While a pension may form the cornerstone of retirement planning for most people, there are many alternative investments to underpin your financial wellbeing in your golden years.
Given that the basic state pension currently pays out just £107.45 per week (for a single person or married man, woman or civil partner who qualify with their own National Insurance contributions) the option to include other investments is certainly worth a look. No better reason to speak to a financial adviser, capable of delivering quality retirement planning advice. This should be done at least annually, in order to effectively monitor your pensions investments, and update them if necessary.
Investment funds come in various types, and offer access to a range of interesting possibilities to suit all tastes. Before recommending a fund or funds as part of your retirement planning, a good adviser will measure your attitude to risk, by assessing your ‘risk profile’.
It is well known that stock market and equity investments generally outperform cash, over the longer term.making them ideally suited to planning for retirement.
Another aspect to bear in mind with funds is that they are flexible, and that by working with your financial adviser you can switch your money to a better fund, if your current one isn’t performing. Furthermore, your investment risk profile may change as you come closer to retirement, and you may wish to reduce your exposure to stock markets and shift your money into more cautious funds, in the latter stages of planning for retirement. For that reason, funds investments – like any other – should be reviewed on a regular basis.
Check your investment risk profile
ISAs for tax-efficient Retirement Planning
Another long-term savings option as part of your planning for retirement is the trusty Individual Savings Account or ISA. ISAs come in two models, the cash ISA and the stocks and shares ISA, and offer some attractive tax savings on growth. Investment interest from a cash ISA is paid free of Income Tax, while growth in a stocks and shares ISA is free of Capital Gains Tax and Income Tax.
Investment in ISAs is subject to limits and conditions that will be explained by your financial adviser. (Find out more about ISA allowances) Bear in mind that you can run your ISA indefinitely, adding money up to your allowance threshold every year and building a tidy nest egg as part of your retirement planning. And unlike a pension, where your money is tied up, ISAs are available which offer various options for easy access to your cash, should an emergency arise.
It is important to find the right retirement options for your needs, so discuss this with one of our advisers today – Get Pensions advice or call 0800 678 5929
