Financial advice for those nearing retirement: key areas and benefits

As retirement approaches, the importance of making informed financial decisions becomes vital. Getting professional financial advice can provide invaluable clarity and support at this critical point. This article explores the key areas people close to retirement often seek advice for and how it can help them achieve a more secure and comfortable retirement.

 

Choosing the right way to take your money

One of the key decisions for people nearing retirement is choosing the best way to take your money. Some of the things that people prioritise when making this choice is: having enough to be comfortable and enjoy the things they’ve worked hard for, making sure it lasts and leaving money behind for loved ones.

Financial advisers will look at all of the options open to you and explain what each is in plain English. They’ll create a comprehensive plan that recommends how to maximise your income, minimise taxes, invests in the right place for you and how to ensure you have enough funds to cover your living expenses throughout your full retirement.

 

Recommending the correct investment

As you transition from saving into your pension to taking an income from it, your investment approach may need to change. Choosing the right investment is about finding the balance between how much risk you're able to take and potential growth.

It doesn’t remain static either. For example, when people first start saving into their pension they are often more open to taking risk. This may be because there could be many years ahead of them to make up a shortfall in any poor fund performance. On the other hand, those approaching retirement may be less likely to take as much risk.

However, the amount of risk you may be willing to take could also be influenced by how you plan to take your money. Those planning on buying an annuity may want to take less risk as a sudden fall in value could give them a smaller income for the rest of their lives. For those moving into drawdown, their money is going to remain invested (possibly for a long time) so they may not feel the need to take less risk at this stage.

Finding the right balance between risk and potential reward can be tricky and it should also be regularly reviewed. A financial adviser will review your investments and make recommendations that align with your risk appetite and retirement goals. They’ll explain their recommendations and give advice on asset allocation, diversification and risk management to help you preserve your wealth while still aiming for growth. Although remember, as with all investments they can fall as well as rise and you may get back less than you put in.

 

Becoming more tax efficient and using tax relief

The word “tax” can send a shiver down your spine. It seems so complicated and not understanding it properly can mean you end up paying more than you need to.

There’s also so many different tax elements to be aware of. Tax in relation to pensions could mean income tax (both for you and your loved ones), tax-relief or Inheritance Tax (IHT) – more on that in the next section.

We won’t go into too much detail just now as there’s a lot of ground to cover. But a financial adviser will look at how you could benefit from tax relief, how to reduce income tax and how to keep more of your money for your loved ones by reducing IHT.

 

Keep more of your estate out the hands of the tax-man

It’s important to many people that their assets are left to those they love the most when they pass. Unfortunately, as house prices rise and tax-free allowances are frozen, more and more people are left with an Inheritance Tax (IHT) bill.

IHT laws are complex, but getting professional advice will help create strategies to minimise any taxes on your estate. They require careful planning and sometimes need to be implemented sooner rather than later. So don’t delay. If you are worried about IHT then we would strongly recommend speaking to a financial adviser today.

 

Bringing state pension into your retirement plans

You might think that when you hit retirement age, you’ll simply start to receive your state pension. While this is true to an extent, there are some things to consider that might help you boost that weekly income.

For example, if you’re not on track to receive the full state pension, you may be able to top it up to give you a bigger income. You also have the option of delaying receiving it in exchange for a bigger income. A financial adviser will factor in your state pension, when you will receive it and how much alongside your other retirement income to create a holistic plan.

 

Peace of mind

Perhaps one of the most significant benefits of financial advice is the peace of mind it brings. Knowing that you have a comprehensive financial plan in place, created by an expert and tailored to your unique needs and goals, can reduce stress and help you feel confident about your financial future.

Financial advisers can also provide ongoing support and recommendations, helping you react in a positive way to any changes in circumstances. This could include changes in family, health, regulations, markets or your pension performance amongst other things.

 

Providing clarity and confidence

Approaching retirement is an exciting time, but we know it can also be stressful. You’re faced with a number of decisions to make and it’s not easy knowing which is the right one for you. Plus it can feel like you need a degree in pensions language just to understand what everything means.

However, our advisers specialise in providing clarity. They take time to explain what all the options mean in plain English and will answer any questions you have. They’ll make it clear what the correct course of action is for you and the reasons for making those recommendations.

So if you'd like clear retirement advice then simply click the button below to speak to one of our expert retirement advisers.

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