Wealth of advice: Good financial planning doesn't stop when you have retired

Once you have retired, ongoing advice is so important when you think about outside factors such as market volatility and investment performance, and considering your financial plan will need to continue working for you long after retirement. A good plan doesn't stop when you have retired.

2 min read

Investment matters

Once you are retired, a couple of things happen to make it even more important to keep an active eye on your future financial plans. You are more likely to need to start withdrawing more from investments and to manage the ongoing liquidity of at least a portion of your portfolio to ensure that you have the availability to withdraw money when you need to.

Because you may need quick access to cash you may have a lower tolerance for investment risk, so more regular reviews may be increasingly important to maintain the right balance.

This could mean that you wish to change your approach to investing. Whether your attitude to risk has changed or you simply wish to explore new kinds of investments, seeking expert advice will be crucial when it comes to ensuring any changes made won’t affect the stability of your retirement plans.

Regular updates to review your finances will also help determine the best options so that you can continue to enjoy your money for as long as possible. It's a time to ensure your investments are diversified to maximise your future returns.


Estate matters

Throughout your life you will have worked hard to build up all of the things you have around you. But now that you have retired have you stopped to think about how much everything you own is worth? Your home, your car, your savings, and investments, all of your possessions. They all add up.

If your estate (your assets less any liabilities) currently totals more than £325,000 (this is known as the Nil-Rate Band or NRB), your beneficiaries may be liable to pay 40% Inheritance Tax on the value of anything that you leave to them over that amount. However, in addition to the NRB is the Residence Nil Rate Band (RNRB), which for current tax year, and for the 2022/23 tax year is £175,000, giving a combined increased allowance of £500,000. To be eligible for the RNRB you must pass your home or a share of it to your children or grandchildren. This includes stepchildren, adopted children, foster children but not nieces, nephews, or siblings.

Ensuing you utilise these various reliefs and exemptions (if they are applicable to you) may mean more of your hard-earned money will be left to those you care about, rather than having to be paid as tax instead.

Until your beneficiaries have settled any Inheritance Tax due, they won’t receive any of your estate, as it’s frozen until the debt is paid. This probably isn’t the sort of legacy you want to leave behind. Fortunately, there are ways in which you may be able to reduce a potential Inheritance Tax liability, all revolving around sensible financial planning.


Care matters

As we live longer lives, it’s increasingly more important to receive ongoing professional advice. With the right planning, you can ensure that all you want for your retirement years is taken into consideration and carefully planned for, and this may include personal care costs. Ensuring you have enough money to pay for the type of care you would want will provide peace of mind and confidence for your future.

Evaluating your current financial situation, including a review of your assets, your Will and what your planning objectives are is key to continued financial confidence. By reviewing and identifying any potential funding shortfalls will allow you to take action as soon as possible. It’s also worth making sure that you understand what existing state benefits and allowances may be available to you. 


Tax Matters

Receiving more income in retirement can make all the difference to the type of lifestyle you get to enjoy in later life. One way to keep more of your income is to minimise the taxes you pay.

No one likes thinking about taxes, much less paying them. Your most important planning goal should be to ensure you have sufficient income in retirement, and income that will last a lifetime. Investing and withdrawing retirement funds in a tax-efficient way is essential to boost and maintain your retirement financial wellbeing.


Please note: This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The content of this article was accurate at the time of writing. Whilst information is considered to be true and correct at the date of publication, changes in circumstances, regulation, and legislation after the time of publication may impact on the accuracy of the article.

The information in this article is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change and tax implications will be based on your individual circumstances.

The value of your investment(s) and the income derived from it, can go down as well as up and you may not get back the full amount you invested.

Please note, The Financial Conduct Authority does not regulate advice on taxation, Estate Planning or Will writing.

You should seek legal advice to ensure that your Will reflects your wishes and is legally binding.

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