Is it still worth having a pension? | Financial Advice Cardiff

Is it still worth having a pension?

09 Jul 2018 | Articles |

When it comes to financial planning, retrospective action is not an option. Whether you own a business and need to plan your financial future both professionally and personally, or you aspire to retire comfortably, you need to start putting a financial plan together today.

There are a number of different options available to you when it comes to retirement planning, from property to state benefits, a trust or inherited income. One of the most common alternatives to taking out a pension amongst professionals is owning a second property, which they can then rent or sell when they retire.

But a second property this is not without its caveats, as there is always the risk of changes in property value due to changes to the neighbourhood or global shifts in estate prices. Both this and selling your primary property to downsize may incur significant costs in the process, thus reducing the amount of money you actually raise as extra income.

Immediate spending vs saving for retirement

What is the value of putting money towards a pension now? We know that if you own a profitable business, treating yourself and your family, travelling and investing in your children’s education will be a priority for you when it comes to planning your finances. However, putting money towards a pension now will allow you to live as comfortably in your retirement as you do now.

The importance of financial planning

There are a number of factors which you need to consider when deciding whether to take out a pension plan:

  • Your retirement will likely be longer than you expect
  • Economic and social conditions may have changed by the time you retire
  • Life in retirement could be more expensive than it is now

All of these elements highlight why it’s essential you look after your future finances, now.

The benefits of financial planning

With your retirement funds being mostly reliant on your individual savings, having a pension as part of your financial plan is the best way to ensure you are putting aside enough money to create a future which will work for you.

Have you asked yourself the following questions:

  • Are my current contributions adequate to my aspirations for life on retirement?
  • Do I know how much I will need my pension to provide on retirement?
  • Will I have paid off my mortgage by the time I retire?
  • Should I plan to downsize to reduce living costs?
  • What does retirement look like? Does it involve travel and luxurious holidays, or staying close to home and seeing my family each weekend?

We help you answer these questions, and many more, during our Discovery Meeting, which is the first part of your financial planning journey with us.

Don’t defer the decision, start planning today and be confident that you will be able to enjoy the retirement you are hoping for.

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