Retirement Financial Planning


Retirement planning is about much more than merely joining a pension scheme and then waiting to retire. It's about understanding your financial circumstances now as well as thinking about what a secure, fulfilling retirement looks like for you. To achieve this you should take a holistic view of your situation, understand your retirement goals and identify the investment strategy to help you achieve those goals. If you have little investment planning experience or would prefer to focus on other aspects of retirement, you may also benefit from seeking professional financial advice.

In this article, we discuss some tips that can help you get started with your planning.

Begin Your Retirement Planning

To achieve financial security when you reach retirement age, you should establish long-term saving and investing strategies as soon as you can. This process includes planning for your own retirement, a spouse’s retirement and any legacy or estate you plan to pass on after your death.

You will also need to consider your long-term investing goals. If you require investment growth in retirement to meet your investing goals, you may need to invest in asset classes with higher long-term returns. Don’t forget to plan for the unexpected too. Your plans may change over time; your home might require emergency maintenance; or a family member—such as child or grandchild—may require financial assistance. For these potential circumstances, you may be better off planning for more long-term investment growth, depending on your situation.

First, though, you should identify your long-term investing goals. Here are just a few potential goals you might choose:

  • Protect Principal—Running out of money in retirement is a common worry for pension investors. However, if you place most of your investments into cash savings accounts or fixed interest, you may not achieve the growth you need to ensure you have enough income throughout your retirement.
  • Maintain Purchasing Power—To maintain or grow your purchasing power over time, your portfolio will need to grow enough to counter the cost of inflation. Depending on your situation, pensions alone may not be enough. To cover your retirement costs, pay for any unexpected costs and make up for inflation, you may need more portfolio growth than you realize.
  • Increase Wealth—More wealth can give you more spending flexibility later on in life and potentially the ability to pass on a legacy if you wish. This goal often requires a focus on portfolio growth and an asset allocation aimed at higher long-term returns. Are your pension funds alone going to benefit you enough?
  • Spend everything—A few retirement savers have no concerns about running out of money and have no desire to leave a legacy. Instead they plan to spend down their entire portfolio. This approach has its own risks, including potentially exhausting all funds before the end of your investment time horizon. Running out of money in retirement can be devastating, so careful financial planning is essential.

Calculate Your Investment Time Horizon

How long will you need your pensions and money to last during retirement? Or, put another way, how much is your retirement going to cost? This is about more than life expectancy, although it's an important factor. People are generally living longer than in previous decades, so just planning for the average life expectancy could increase your risk of running out of money if you live longer. In fact, as these figures are only averages, you could live longer—maybe much longer. Furthermore, the potential life expectancy of your spouse or any other dependents should also form part of your retirement planning as well as any plans you have to leave a legacy for heirs or charity.

How Much Growth?

To determine how much growth you may need to meet your long-term retirement goals, begin by looking at your current financial situation. This can give you a rough idea of how close you are to meeting your long-term financial targets. From there, you can determine roughly how much portfolio growth you may need in order to meet your long-term retirement needs, and identify a strategy to pursue those goals.

How Fisher Investments UK Can Help

Fisher Investments UK knows that every client's situation is different. We also understand investors need a long-term retirement savings strategy tailored to their personal needs to maximise their chances of living a comfortable and happy retirement. We believe the earlier you start planning and saving, the more likely it is that you will reach your long-term objectives.

Fisher Investments UK provides thorough investor education and may be able to help you with your retirement and financial planning. To learn more, download one of our educational investing guides or contact us to speak with one of our qualified professionals today.

Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.