“Regrets, I’ve had a few…”

09 Aug 2016 | Articles |

Of course the rest of that line is “but then again, too few to mention.” It was all very well for Frank Sinatra to reflect that he did it his way, but for those of us pondering our finances and financial futures, we probably won’t be able to apply this wording to our financial planning if we end up having regrets.

There is no rewind button in financial planning and there really is only one way of getting yourself to retirement in a good position.

If you hit retirement and find you are short of your desired income level, you cannot suddenly decide to go back and save more or invest better. You might well think, I did really well in my working years, I worked hard, I looked after my family, I enjoyed myself, but if this is then followed by “but……” there could be – probably will be – a problem.

This lack of a rewind option must surely inject urgency into ensuring that you have your financial planning working for you now?

Our recently published guide on longevity (click here to obtain a copy of this) highlighted how long most people will spend in retirement in the future – and how this length of time is probably much longer than most expect.

This has a profound impact on financial planning because even a relatively small number of extra years in retirement can radically increase the amount of money needed in retirement.

We are concerned that there is a disconnect appearing between today’s retiree and tomorrow’s. People in retirement today – on average – have had a very good set of conditions taking them into retirement: generous final salary pension schemes, long term rising house price values, a reasonable ratio of savings years/retirement years, to cite a few examples.

The next generation of retirees has a very different (and worse) set of conditions and the generation after that probably even more extreme conditions. These are economic and social conditions which are not conducive to supporting generous retirement incomes and meeting high expenditure requirements.

This means at an individual level the need is for each person to act decisively towards their own retirement plan. There seems no obvious alternative.

“I planned each charted course; each careful step along the byway”

Getting your future planning right is almost all about having a structured financial plan, which includes working your savings and investments around a defined long term cash flow forecast. This forecast is defined by your goals.

This is the opposite of a rewind button – it is your fast forward button, available to you now.

If you get this right you will, in your own life, create a future pathway which will work for you. Regardless of the conditions around you in the wider world.

Doing this is the best way to ensure that you don’t suddenly find yourself at your retirement point with any regrets.  Or if you do have any, they will be too few to mention (or worry about).

If you would like to talk to us about putting a structured financial plan in place, call 02920 450143 or email info@penguinwealth.com.

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