Financial planning comes into focus in the New Year

As the final mince pies make their exit from the supermarket’s discounted shelves, we find ourselves adjusting to the ‘normalcy’ of our usual routines. And with this in mind, there couldn’t be a better time to shine a spotlight on financial planning.

Consistently evaluating financial goals and reviewing the performance of savings and investments is crucial for effective long-term financial planning. Nevertheless, life often throws unexpected challenges our way.

So, the fresh start offered by a new year can often serve as a powerful motivator to reassess your financial position, particularly when it comes to preparing for retirement.

Reflect and adjust

The cost-of-living crisis made 2023 a challenging year for many. Indeed, the combination of high inflation and soaring interest rates lead to financial anxiety and a decline in savings for some.

Within this context the thought of planning the next steps of one’s financial planning strategy can seem like a daunting task for even the most experienced financier. However, breaking the process down into a few simple steps can help to take the sting out of the process.

As a starter for ten, reflect on your current situation. This involves a quick inventory of your pension savings and investments to ascertain your current wealth, taking in to account any debt and making sure to track down any potentially lost pension pots.

Our recent blog outlining some of our favourite financial resolutions looks at this point further.

From here, you should have a clearer idea of what you need to do next. This may involve increasing pension contributions to make sure you will hit your target pension pot amount for retirement, or perhaps you’re in a position to consider higher-risk investment strategies (and have spoken to an adviser to understand your risk appetite and your appropriate options). A thorough review means you can start considering these options and to begin putting a plan in place.

Looking ahead

Next, start factoring in what the year ahead could look like for you.

If you anticipate an increase in income due to a career move, you might want to revise your budget and consider allocating more towards savings or investments. Conversely, if you’re planning a major expense like buying property, you need to assess how this will impact your overall financial picture. Will it require adjusting your monthly budget? Should you think about redirecting funds from one area to another? – all important questions you should ask yourself if this is the case.

For those transitioning to retirement, it is crucial to fully understand what that entails. Establish a timeframe for when you may begin winding down from work and ensure you have a clear understanding of the type of lifestyle you want to enjoy in retirement and how your funds in their current state will enable you to achieve this.

Staying on track

Putting a financial plan into place is just the beginning – it’s important to remain actively involved with it. Regular reviews ensure you stay on track with savings goals and can adjust if unforeseen changes in political, economic, or personal circumstances occur.

Fortunately, this doesn’t have to be a solo endeavour. Seeking professional advice can be a powerful tool for pension planning success, and our team of Independent financial advisers at My Pension Expert are here to help you. We offer personalised solutions tailored to your unique circumstances, goals, and risk appetite. In doing so, you’ll be equipped to make informed decisions to achieve the retirement you desire.

By reflecting on the past, anticipating future changes, and making necessary adjustments, you can lay a solid foundation for financial success in the coming months and years. Remember, financial planning is an ongoing process that evolves with your life circumstances and surrounding economic conditions. Embrace the possibilities of the new year, and let it be a catalyst for achieving your financial goals.