Retirement planning 101

Regardless of how wealthy an individual is or how many assets they hold in a financial portfolio, the principles of retirement planning are the same. High net worth individuals tend to live a grander lifestyle and thus spend more. This means that retirement savings also have to be significantly higher to maintain the lifestyle during retirement.

It is vital that you have regular reviews with your financial advisor to ensure your retirement plans are on track and that lifestyle creep doesn’t diminish the value of your retirement savings.

Keep these basic principles in mind as you plan your retirement.
•    Understand your portfolio – Be aware of where your money is invested, what kind of funds you are invested in, and that investments are suitably diversified to mitigate risk. Also know what your portfolio consists of e.g. investments, properties, gold bullion, artwork etc.
•    Go big – Contribute the maximum to work pensions. Generally there is maximum percentage of how much you can contribute towards your pension. It is in your best interest to contribute as much as you can, just make sure it is invested in good funds.  Employers might match your pension contributions, so take advantage of the free retirement boost.
•    Don’t carry all your eggs in one basket – Work pensions can be a great source of retirement income, but jobs get changed on average every 7 years. The capital doesn’t have the advantage of contributions over the long-term that earn compound interest. A private pension plan is a way to contribute towards retirement savings for the entire duration of your working life regardless of how often your change jobs.
•    State pensions – A state pension might seem like a pittance if you are a high earner or have a large portfolio, but don’t knock it. That extra monthly income could fund your hobbies or be saved for a rainy-day fund. Know what you are going to get. It can form part of the retirement budget.
•    Review, review, review – Have regular reviews with your financial adviser to make sure you are on track to achieving your retirement goals. Your financial portfolio needs regular rebalancing to ensure optimum returns according to your risk profile.

Retirement planning is probably the most important investment you will ever make in your working life. Make sure it is suitable for your needs and financial situation. [email protected]

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.