58
THE GUIDE TO... RETIREMENT PLANNING
THE CHANGING DEMANDS
ON PENSIONS
by George Critchley Chairman, True Bearing
In the good old days, we saved for 40 years of our life, to fund the last 15 years. Then we met our maker.
Everyone knew where they stood. Today it’s different. We are now funding for 40 years knowing that this pot of money may have to last another 25 to 40 years.
The mathematicians have calculated over the longer period, that you would have to pay in more than your entire salary, for 40 years, to be sure you have everything financially covered till death. Unless you were lucky of course and died early!
Why bother at all? I hear you question. Well, there’s more to this.
Many are not now retiring at 60-65 years of age. We know that we feel good at 60. We wind down a bit, maybe work part-time. We become industry consultants, sharing our wealth of knowledge. We volunteer, we even start new businesses.
The reality is that we need access to some of our pension pot, but not all. The ability to drawdown money, on the drip, is very helpful. The remainder can then stay invested for longer. The maths of leaving money to grow for 50 years to fund 15 to 30 years is much more attractive.
So what about our properties? If you have been in your house for 25 years or more, its value will have more than doubled. If you have some part of your mortgage still to repay, do you repay it? Whilst interest rates are so low, is it better to take some of your pension pot to clear it, or just keep paying the interest?
Many in retirement are enhancing their lifestyles by drawing down income or capital from their accrued equity. If you have no dependents or plans for this money, this is a no brainer. If you have, then it is a more nuanced decision.
Why starve yourself so that your kids can live it up? Equally, we don’t want our kids to financially suffer later in their lives. Either way, Equity Release should be a consideration in most people’s retirement planning.
We want to avoid all those firms that pollute and damage the planet
The rise of the impact pension
Now let’s talk coronavirus. Sorry, but it has just changed the retirement planning world.
A steady culture shift has suddenly become a stampede! The odds are that before coronavirus you never bothered to check the ethics and integrity of your pension funds. Now after coronavirus, we care. We care more than we have ever cared before.
We want our pensions in sustainable investments and impact funds. We want our money to do good, and avoid all those firms that pollute and damage the planet. I can tell you, if you feel this way, you are not alone.
So you thought retirement planning was boring? It has never been more exciting!
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72
