Are You Retirement Ready?

Insight | by Stephen Kiggins
Forth Capital Find Out if You Are Retirement Ready

Planning for retirement can seem like a daunting task.

As a result, many people procrastinate and put it off, with the intention of doing it ‘one day’...
that ultimately never comes.

But the earlier you start to think about and plan for this important chapter of your life, the better, as it will greatly improve the likelihood of you achieving the lifestyle you truly want, and importantly it will also help you to stop worrying about the future, enabling you to live in the moment, safe in the knowledge that tomorrow is taken care of.

So, what’s the solution?
Well, as with any task that might initially seem overwhelming, the secret is to break it down into smaller, easier-to-manage chunks, that can be worked through one-step-at-a-time.

Who knows, you might already be on top of all the relevant considerations, but to determine how ‘retirement ready’ you actually are, take a look at the questions below...

What do you want your retirement to look like?

When you decide to step back from work and at last have time to pursue the things that you're passionate about, what will this look like for you?

Will you travel the world and look forward to ticking off experiences on your bucket list? Perhaps you will want to indulge a long-standing dream to own and restore a holiday property, or a classic car? Or maybe you will want to finally set up your own small business, monetising an interest or long-standing hobby?

Whatever you want to do, it’s crucial to start thinking about what you want retirement to look like for you.

Not only will this allow you to maximise your hard-earned retirement years, but it’s also the first step in assessing how much money you’ll need to live on.

Defining how much you will need to draw from your pension each month to fund the kind of retirement you envisage, and whether this will be achievable with the investments you’re accumulating, is key.

77% of people don’t know how much they’ll need in retirement
Source: Retirement Living Standards

Where in the world do you want to retire?

As an expat you may be planning to retire in the country where you're currently resident, or ultimately your intention might be to return to the UK. But wherever in the world you choose to retire, there are implications that it pays to be aware of in relation to the pensions you've accrued over the course of your career.

To mitigate your currency risk, optimise your retirement income and have more control over how your pensions are invested, it could for example be beneficial to consider consolidating and transferring your pensions into an international pension plan.

Do you know at what age you plan to retire?

The key benefit of planning ahead early is that it gives you more flexibility about when you can retire.

The days of waiting until a prescribed age to retire are long gone. Some people dream of retiring as soon as possible, whereas others want to continue working but perhaps as part of a 'hybrid retirement' plan.

Speaking to a financial planner will help you to assess your options and align your retirement planning with your circumstances and aspirations.

Using our online Financial Freedom Calculator, choose the age at which you'd like to step back from work and see if you're currently on track

Do you know how many pensions you have and their cumulative value?

Retirement isn’t the only thing to have changed. In most countries around the world, within a single generation, working life has changed markedly too. Over the course of a 40 year career it's now likely that you will have worked with a number of different employers, making it very easy to lose track of all the pensions you might have paid into. Without taking the time to track these down you could be leaving significant sums of money unclaimed.

There are 1.6 million ‘lost’ pension pots in the UK alone, worth an estimated £20 billion
Source: Pension Policy Institute

And as an expat you’ve likely accumulated an array of investments; PEPs and ISAs in the UK, a Third Pillar Pension if you’ve worked in Switzerland, a ‘Super’ in Australia, and/or a 401k if you’ve spent time in the US.

1 in 5 people don’t know how much they have in their pension pot
Source: Unbiased/Opinium survey of 2,000 pre-retirement UK adults (June 2020)

Your financial planner can help you to get a clear understanding of the total value of your pension funds and disparate investments, then create a plan for you that optimises their growth, flexibility, and currency options – in the most tax-efficient way possible.

Do you know what your pensions are invested in and how those investments are performing?

Ensuring that your investments are aligned with your attitude to risk throughout your lifetime is very important, so a ‘fire and forget’ strategy which doesn’t review and potentially re-align your investments with your life-stage and your capacity for loss, is a key consideration that needs to be addressed.

Do you know when you can access your pensions and how much you can take from each pension as a [potentially tax free] lump sum?

Different pensions will have different stipulations regarding when you can access your funds, the initial amount that you can withdraw, and the associated tax implications.

If you’re not aware of exactly when you can access each of your pensions and how much you can take initially as a [potentially tax-free] lump sum, this could seriously compromise your future plans.⠀

Do you know whether your assets will benefit your family after your death?

It is important to consider the provisions made for your spouse/partner and dependents/family when you die.

Many people are unaware that when they die, if their UK pension is a Defined Benefit ['Final Salary'] scheme then their spouse would only receive a reduced benefit and their children could receive no benefit at all, depending on their age.

Equally, many expats are unclear about how UK inheritance tax could impact the funds that are passed on to their beneficiaries.

Our dual-qualified international financial planners can advise you on how to maximise the benefits for your loved ones and pass on your assets in the most tax efficient way possible.

In summary

Planning ahead and seeking expert advice on your retirement planning and pensions doesn’t just make the task easier, there are significant financial benefits too. The International Longevity Centre found those who got advice were far better off financially after ten years than those who didn’t.

It’s easy to put off pension planning until a later date, but by starting now you’ll avoid potential pitfalls, identify ways to grow your pension pot, and ultimately ensure your retirement is everything you want it to be.

In less time than it takes to make a cup of tea, find out how 'retirement ready' you are by taking our online test.

Your 'retirement ready' score out of 10 will let you see whether you’re on track – and highlight any gaps that you need to address. The personal plan we can then create for you will provide you with a clear, effective, roadmap to simplify your retirement journey and optimise your assets.

To arrange a free initial consultation with one of Forth Capital's dual-qualified international financial planners and pension experts, click here. Together, we can ensure that you are retirement ready.

Follow us on...

Read more of our latest articles


Please complete the form below with your details and we will get back to you as soon as possible.

FC laptop 2
You must enable javascript to view this website