A financial plan is the secret to a great retirement

At a glance

• Some of us want to travel. Others want to escape to the country. Most of us want to make sure we leave something to our loved ones.
• But balancing all the things you’d like to do against all the things you need to do means having a sound financial plan for retirement.
• Financial advice and a personalised retirement income plan can turn a good retirement into a great one – and mean you can stop working earlier than you thought.

“We’ve made a plan. I’m retiring early and going to travel more. Peru’s first!”

The average person spends between 10 and 20 years in retirement but with longer life expectancies, as many as one in ten of us could celebrate our 100th birthday¹.

With even more years of retirement ahead than we might expect, we want to be sure that the retirement we imagine will be one we can afford.

“Big decisions call for invaluable advice.”

In the next six months, one in three over-44s will actively seek advice on planning our retirements. According to our recent Real Life Advice Report, retirement planning is the biggest single reason for seeking advice². In fact, 55 years old is the nation’s peak age to start seeking financial advice about retirement. And advice is what you need to enter some of the best years of your life with confidence.

Starting to plan your retirement

How would you finish the sentence: “I’ve always wanted to…”? ‘Life-after-work’ can be hard to visualise – especially when you’ve still got your nose to the grindstone.

So before you start planning the money, plan your ‘bucket list’. Places to see, new hobbies, experiences you’ve always wanted to try, visiting friends in far-flung places, escaping to the country. At the same time, we need to factor in enough money to maintain our day-to-day lifestyle, and have enough to cover increased healthcare costs as we get older. That’s a big juggling act. Financial advice can help turn a ‘wish-list’ into a practical and sustainable roadmap for retirement.

How to have the retirement you deserve

A good starting point is to set aside a regular sum of money in an easily accessible account or Cash ISA for emergencies, as your safety net. As a rule of thumb, aim to have enough in your float to cover your outgoings for six months. You can allocate another regular monthly amount in other tax-efficient ISAs, or your pension for medium-and long-term goals.

You have plenty of options about where to save – from Stocks & Shares ISAs, Cash ISAs or other investments, and pensions. Each has different tax advantages, pros, and cons, so this is another prudent reason to seek financial advice when planning ahead for retirement.

Financial advice and retirement planning go hand in hand

“A retirement plan is paramount. A financial adviser will help you work out what your goals and ambitions are, help find the best products for you and take the stress away. These days, retirement looks very different – and it’s not all about the pension. It’s all about the plan.”

The key to stress-free retirement income is building in as many flexible options as possible from ISAs to pensions, investments or even property. That diversification helps you spread your risk, and means you can choose which you want to draw on first when you stop working. If one does less well in a particular year, you can turn to another in the short-term. And of course, many people turn a hobby or skill into an income in retirement, or decide to rent a room out in a larger home before they consider downsizing. Plus, most of us will receive some form of State Pension.

Checking in regularly with your financial advisor means you can tweak your financial plans as you go, and as your situation changes over time. It’s really reassuring to be able to talk over your hopes and dreams for retirement with someone you trust – and feel secure that you won’t be compromising your living standards going forward.

Could I afford to retire early?

According to the Pension and Lifetime Savings Association (PLSA), a single person will now need £14,400 a year to achieve the minimum living standard, £31,300 a year for moderate standard of living and £43,100 a year for a comfortable lifestyle, which includes a two week holiday in Europe and several UK mini breaks. For couples, the costs of a minimum, moderate and comfortable retirement now average out at £22,400, £43,100 and £59,000 per annum.³

Learning that it’s OK to spend, not save

Retirement planning is, of course, about much more than spreadsheets and numbers. It’s probably the biggest lifestyle change you’ll ever make, and one you may want to consider over several years.

From the moment we open our first bank account, most of our working life is spent saving, as well as spending. It can be hard to learn the ‘spending habit’ after your career. Being able to talk things through with an expert who knows you well helps you feel confident that you can achieve your goals, and you won’t run out of money. That practical and emotional support can be invaluable at this turning point in your life. And retirement could be the longest holiday you’ll ever take – with a plan in place.

Ready to turn your retirement dreams into reality?

Whether you dream of traveling the world, escaping to the countryside, or leaving a legacy for your loved ones, a sound financial plan is the key to making it happen. Take the first step today and get in touch.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Please note Cash ISAs are not available through SJP.

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