When considering retirement, most Britons likely share the same goals: achieve long-term financial security and maintain a good quality of life throughout the entirety of their retirement years.
This is, of course, an understandable ambition. However, given the context of the cost-of-living crisis, it may not seem achievable. Indeed, inflation has soared to a 40-year high of 9.4%, and energy bills are continuing to search. As such, pre-retirees will likely be reviewing their retirement strategy as a matter of urgency.
And whilst there is no one-size-fits-all retirement strategy, there are certain steps, which can be undertaken, to create a financially sustainable retirement strategy…
Be realistic about retirement goals
First and foremost, it is vital for Britons to understand exactly how much they will need to sustain their desired quality of life. From there, they will be able to calculate how much they need to save.
It is important to take into account all of their assets, which will be used to fund their retirement; this will include everything from personal savings, property, and investments to pension pots. In doing so, Britons will be able to gauge their financial position and see how much action must be taken in order to save to remain on track with their retirement plans.
It should be noted that, if savers have accumulated multiple pension pots throughout their career, the government’s pension tracker can help them track down their lost pension. Whilst it does not grant immediate access to one’s pension information, it provides them with the correct contact information to reach out to their pension provider and access their information.
The launch of the government’s pension dashboard – due to be in 2023 – will also make the process easier, as it helps people view all their pension information in one place.
Understanding all options
Next, savers should explore the various retirement finance options available to them. And there will be an option to suit everyone’s needs, from flexible access drawdowns to an annuity.
However, even after conducting personal research, it can be difficult to understand which option will help individuals to achieve their desired retirement outcome. Accordingly, Britons would certainly benefit from seeking independent financial advice before deciding which product to pursue.
Indeed, financial advisers, like our team at My Pension Expert, will consider the entirety of a client’s financial situation, as well as their goals and risk appetite. In doing so, they will be able to make tailored recommendations as to which product will suit their needs and set them on the right track to achieving a financially secure retirement.
Regular reviews
If the previous two years have taught us anything, it is that an individual’s situation can change in the blink of an eye. And such sudden changes can wreak havoc with one’s retirement plan.
So, in order to avoid the need for any dramatic overhauls to one’s retirement plans, it is advisable to conduct regular audits of one’s plans. For example, at My Pension Expert, our financial advisers offer the option for annual (or even quarterly if requested) reviews of a client’s retirement strategy to ensure it still suits their needs. Thus, if an individual’s situation changes, small adjustments can be made. This ensures that the client remains in control of their finances and avoids any panicked decisions which could damage their financial future.
Creating a financially sustainable retirement strategy might seem like an overwhelming task – but it needn’t be. Provided that Britons commit to careful planning and research and seek independent financial advice, when necessary, many Britons will soon find themselves in a strong financial position and able to sustain their desired lifestyle throughout retirement.