Pension Awareness Week: are you on track for the retirement you want?

Getting ready for retirement involves simple reasoning: the cost of your lifestyle needs and aspirations in retirement must be lower than the amount you can afford to draw upon retirement.

But when it comes to doing the math, it’s more complicated than that. It’s not enough to make sense of how much you will have when you get there, it’s also about leveraging the best drawdown strategies, as well as remaining invested so that your portfolio can continue growing for as long as possible.

In this article, we’ll outline some of the ways to check if you’re on track to achieve the retirement you’re hoping to achieve.

Your pension is your ally

A pension is undoubtedly an important element that could have a great impact on how you get to live your retirement years.

Like anything else, getting the most of it involves taking some simple steps and checking progress from time to time.

Firstly, make sure you use your annual allowances. If you haven’t fully used up your allowances in recent years, you’re still in time to top your pension up, using your allowances dating back three years from the current tax year.

Your pension is an investment product, so it could be beneficial to ensure you’re happy with the returns it’s delivering. If not, we recommend you speak to an adviser to talk about adjusting the level of risk of the pension’s underlying assets.

A pension is only a piece of the puzzle

Retirement income is usually synonymous with drawing down from a pension, but a pension alone is hardly ever the best way for an individual to financially support their retirement.

A complete wealth plan should encompass many other instruments, the allocation of which should be dependent on their individual circumstances. In most cases, however, plans should utilise tax efficiencies, which instruments like an ISA could offer.

In addition, it’s important to consider your wealth at the specific stage you are of your life, as your needs might evolve. To achieve the best financial outcomes, having an overview of how all aspects of your financial life work – whether it is a new mortgage, estate planning, accountancy services, private banking or any other financial service – could help you understand how they contribute to your overall wealth plan.

At 7IM, our family office services do just that. Get in touch with an adviser if you’d like any help understanding the power of all the elements of your wealth combined.

A professional cashflow model adds clarity

Leveraging a professional cashflow model should enable you to understand all aspects of your wealth. When the time comes to make strategic decisions about your finances, using such a tool is invaluable as it enables you to decide from a position of knowledge.

A professional cashflow model can make projections about how much you might need to save to achieve a specific set of retirement goals. It is also an excellent tool for ensuring that you’re using all available tax allowances, while looking at the broader picture to minimise your overall tax burden.

At 7IM, our Lifetime Wealth Model enables us to shed light on any questions our clients have, whether they are doing enough to retire on their own terms, if they can afford a new or second home, or perhaps whether they can afford to help their children with private education or first property.

Talk to an expert

The most effective way to find out if you’re on target to meet your retirement plans is to understand how all the elements of your wealth are working together to deliver the returns you need.

Using our Lifetime Wealth Model and applying our Tax Optimisation Strategy, in collaboration with our list of trusted partners we provide a complete service that encompasses all aspects of your finances, underpinned by investment excellence provided by our Investment Management team.

Regardless of where you are in your journey towards financial freedom, talk to a 7IM adviser and we’ll be happy to help.