Planning for Retirement
With the current retirement age set to rise especially for many women, now is the time to organise your affairs to ensure, firstly, that you have enough income to meet your needs once you are retired and, secondly, that your legal affairs are in order.
Income in Retirement
If you have a pension plan you should pay into it as much as you can afford and it is tax efficient to do so. All employers now have to offer a pension to their employees (workplace pension) to which, unless you opt out, you and your employer have to contribute. The younger you are the more chance you have of building up a meaningful sum to provide the income you will need. If you have the means to contribute to a pension plan, it could be thought of as financially irresponsible not to do so. Depending only on the state pension may mean you struggle to afford the lifestyle to which you have become accustomed. Professional advice should always be sought but care should be taken to avoid those whose main purpose is to sell you a product which may not right for you but will garner them commission. More often than not the best independent financial advice, in our experience, tends to be the advisor who is fee charging or at least provides a fee charging option.
Good investment planning
The investment world can be fraught with risk if you dabble without sound advice. At the present time the United Kingdom base interest rate is at an historic low of 0.5% and following recent comment from the Governor of the Bank of England, it is unlikely to rise until possibly the second half of this year. This means that the average cash deposit is paying a low income return which can be almost nil in some instant access accounts. Some term investments can return higher yields which do give a real return against inflation because the Retail Price Index/Consumer Price Index is also at an almost historic low. Better returns for income can be sought by investing in investment markets but this requires professional advice as with pensions. Income yields from many market investments, if there is willingness to assume a higher level of risk, can be better than cash deposits. However, investment need not be overly complicated. It is a question of what level of risk you are prepared to take for the reward which you wish to achieve and over what period of time.
Who can you trust to advise you?
The best advice will come from a professional because, in both financial and legal matters, the regulatory requirements ensure that all advisors have the appropriate knowledge and qualifications. A professional will take time to appreciate your position, wishes and family circumstances and, prior to providing advice, will establish your attitude towards investment risk to clarify what suitability criteria is appropriate for you.
As you approach retirement you should review your will. In particular, as the breakdown of relationships becomes more common, you should ask yourself whether your estate needs protection to ensure that it passes for the benefit of your family or other beneficiaries and is not being attacked or depleted by the actions of others. Often a trust can achieve the above objective. For example, if your child is in the middle of divorce you may not wish to pass a share of your estate to that child directly (in case it becomes part of the divorce settlement) so a trust might be a viable alternative.
Taking care of you
You should keep a signed Lasting Power of Attorney with your will. This enables designated persons, usually family, to take care of you and your affairs if you lose capacity. The Lasting Power of Attorney is more complicated to establish than the old Enduring Power of Attorney but the alternative, if you do lose capacity and there is no LPA, is an application to the Court of Protection which is complex. Information on LPA’s can be obtained online from the website of the OPG (Office of the Public Guardian).
Established in 1966, George Ide LLP offers a full range of legal services and, somewhat unusually in the legal profession, it has its own investment department headed by an experienced partner who is both legally and financially qualified.Business, Family Law, General, George Ide, Investment, News, Private Client, Wills and Probate