Thursday, June 13, 2024

What are the benefits of pension financial advice?

We all have financial goals that we want to achieve, but some may be more complex than others. And planning for these objectives isn’t always so straightforward.

This can be the case when it comes to your retirement, and on this occasion, it may be the best option to seek financial advice. With the expertise of the professionals, you have the potential to set your goals for your future finances, and put strategies in place to ensure you have the funds to live the lifestyle you want, in the later years of your life.

What is financial planning?

Let’s go back to basics first of all and explore what financial planning is. It involves an assessment of your finances, identifying your financial objectives, and then putting a plan in place to achieve your goals. You can do a simple version of this type of planning yourself, but it is best done with the advice from a professional financial adviser, and therefore can be catered specifically for retirement planning.

For example, if you were to visit or any investment management or financial planning firm, you can access a specific option for planning for retirement and consultation from an expert in that field.

When considering financial planning surrounding your pension, you must note that the value of investments can go down as well as up, and you may get back less than you invested.

Each individuals’ tax and financial circumstances and goals will be different, as well as their risk level, and as such, so is their financial plan. Therefore, any strategies put in place by a financial advisor will likely be tailored to meet your specific requirements, and should be flexible to respond to changes in tax legislation and your own circumstances.

Assessing your present financial situation

One of the main benefits of seeking pension financial advice, is the extensive evaluation that an advisor can apply to your current finances and circumstance. This can include calculating how much you need or wish to save for your retirement, based on your income, and the different aspects if or when your income is expected to change.

A financial evaluation for retirement can also take into account the level of risk you are willing to take, when it comes to investment, and how long your life expectancy is.

This can then determine the strategies and plan to put in place to achieve your goals, and what you class as a ‘comfortable’ retirement. A financial planner can help to calculate how much you need to save and possibly invest, with the right asset classes and types of investment to achieve this.

Changes in retirement

With the help of a financial planner, the transition into retirement can be much smoother. It can be a significant moment in your life, and so knowing you have a thorough financial plan, created by an expert, can give you peace of mind.

Furthermore, having built a relationship with your adviser, continuous reviews of your plan can ensure that your investment strategy is flexible, and can involve adjustments over time, as you come nearer to retirement age and move through the later years of your life. This flexibility can help you to structure your finances, if or when you wish to spend more in retirement, or reduce the level of risk of investments.

Being tax efficient

Finally, another benefit of financial advice from a professional, is the help you can receive on tax regulations when you are saving for your pension, as well as when it’s time to withdraw from your pension.

A financial plan can help you make the most of tax allowances, and remain tax efficient when any changes come into place. They can help you navigate the complexities that are inevitably alongside planning your retirement.

This can involve helping with the issues surrounding the Lifetime Allowance (LTA), for example. The LTA is the total amount of money you can save in pension accounts without paying further tax. If you exceed this amount, then you’ll pay tax on the excess. A financial advisor can help plan for this and perhaps implement other avenues to save for retirement.

You can explore more sophisticated strategies, with an expert financial plan, which can help reduce the tax burden and effectively build your wealth to reach your retirement financial goals.

Sam Allcock
Sam Allcock
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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