Your wealth is a means to an end. It is important to remember this when we talk about financial wellbeing, as the aim is not simply about maximising your retirement pot, or adding a few extra zeros to your bank balance. It is about making sure that your finances are in the right place to allow you to live the life you want.
Not everyone will be able to retire before they’re 50. But everyone can prepare by taking relatively small steps to improve their financial prospects, which lets them focus on what is truly important: doing what makes them happy, and what they find fulfilling.
Looking forward to retirement
Retirement used to conjure up stereotypical images of golf courses and cruises around the world. It was a definitive period of someone’s life where they had stopped working, and were hopefully enjoying the fruits of their career. However, this is now less clear-cut. Not everyone can or wants to stop working, and many people take immense satisfaction from continuing in employment. What is more, many employers highly value the expertise and experience older workers bring.
For those approaching retirement, it is worth thinking about what kind of retirement you actually want. Do you want to stop working entirely, and focus on other things, or do you want to keep one foot in the world of work? A significant consideration for most will be whether their savings can sustain the lifestyle they want. More and more, those nearing retirement age or at retirement are putting aspirational goals first, like doing that long-awaited home renovation. If you expect your costs to be relatively high, putting off that retirement date by a year or so, or continuing to work part-time may be the solution.
Ensuring your loved ones are well provided for when you’re gone is also usually high up the list of considerations for retirees. It can be comforting to know that your wealth will go on to help support your children, grandchildren, and other loved ones throughout their lives. A solicitor and a qualified financial adviser are indispensable here, both for the drafting of a will, but also because they can help advise on how you can maximise what you pass on. There’s a range of inheritance tax relief products which can help shield what you leave your family from the taxman.
Please note that any tax benefits will depend on your personal tax position and rules are subject to change. The value of investments can go down as well as up, and you may get back less than you invested.