Spending in retirement

October 10, 2019

When we are wondering what we will be spending in retirement it makes sense to look at the whole picture. Enable’s IFAs in Bishop’s Stortford can help you look at what your retirement cash needs might be. For many, it is easy to think that once we have saved and invested enough to keep us going in our golden years, the job is done. But its only half done as it is vital to consider how to take this money out again.

Spending in retirement

At the point of retirement, you hope you will have a range of assets you’ll hopefully have your pension and perhaps some Stocks and Shares ISA, Cash ISA and perhaps a savings account. You may also have some other assets such as property or maybe even antiques and jewellery.

Lots of people retire from their main job but have other sources of income, including part-time work or rental income from their property. In an ideal world, you would know exactly what you need to live on at every stage of life and you would know exactly how long you’re going to live. But we don’t.

The place to start is to be sure you can cover the essentials of your bills and groceries with your state pension or a defined benefit pension. Once your basics are covered, you can use the rest of your funds to add flexibly to your income. In the earlier years of retirement, you may still want to take on paid work. You may also have flexible income from taking on a lodger or renting out a second property.

Once you’ve stopped work and the essentials are covered by your guaranteed income, you’re likely to need to add to it at various points over the years. You may still have assets in your pension, alongside separate savings and investments in ISAs, so you face the question of which assets to draw on first. This is where Enable’s IFAs can help you look at building up your assets so you are in a position to draw on them in the right order in later years. 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individually tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain.

Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.

 

https://www.lovemoney.com/news/86159/money-retirement-tax-efficient-isas

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