Your financial plan will be aligned with your long-term goals and based on serious life events, like retirement and building a legacy for your loved ones. These are crucial to ensuring you live your desired lifestyle in retirement, with peace of mind that your family will be protected and looked after.
But could there be room in your plan to have a little fun too? With careful budgeting and planning, the answer is “absolutely”. Not only that but planning for fun within your long-term plans is vitally important.
Keep reading to find out why.
Experiences and memory-making are vital parts of a successful retirement
Last year, Royal London found that 72% of over-55s favoured experiences over possessions. From world travel to local festivals and new hobbies, retirement is a great chance to do more of the things you love.
These might include:
- Spending time with family and friends (52%)
- Relaxing (47%)
- Maintaining your health and fitness (45%)
- Travelling (37%)
- Spending time on hobbies (37%).
The report found that pre-retirees worry about a lack of experiences and a lack of purpose.
A recent survey from Bucket List Travels, meanwhile, looked at the bucket-list experiences Brits were most likely to opt for. They included:
- Seeing the Northern Lights (27%)
- Embarking on an American road trip (17%)
- Going on safari in Africa (16%)
- Seeing the Great Barrier Reef (14%)
- Cruising the fjords (13%).
Other popular travel destinations included the Pyramids at Giza, the Great Wall of China and Niagara Falls.
A recent Guardian report also looked at the rise in over-50s festival-goers.
Revisit your retirement planning now and inject some fun into your life after work
If you’re worried that your retirement plans aren’t fun-filled enough, now is a great time to check in with them.
There are some important questions you’ll need to ask yourself, including:
- When do I want to retire?
- What do I want to do in retirement?
- Have my plans changed?
Knowing when you want to retire and having a basic idea of what that retirement might look like allows you to budget and save effectively.
World travel isn’t cheap but adding it to your plans now means you have plenty of time to ensure it’s affordable.
If you haven’t revisited your plans in a while, you might find that your priorities have changed. This isn’t a problem, as long as you discover this in good time and amend your plans accordingly.
Your retirement plans will also affect the retirement options you choose.
A traditional annuity provides you with a regular and guaranteed income for life. This is great for managing regular expenses and makes budgeting simpler. You also have the option to take 25% of your pension pot as tax-free cash. This could be useful for covering one-off big-ticket items like world travel.
More flexible options, like an uncrystallised fund pension lump sum (UFPLS) or flexi-access drawdown, could give you access to more cash, more quickly. But the impetus for retirement budgeting falls firmly on your shoulders and you’ll need to be careful that your bucket-list trips don’t mean you run out of money when you need it most.
Remember, your hard-earned retirement fund needs to last for the rest of your life.
Experiences can be a great way to leave a living legacy
Incorporating experiences into your retirement plans is a great way to make the most of your life after work. But, as we have seen, it is spending time with family and friends (52%) that many deem most important.
Using your retirement to fund once-in-a-lifetime family trips allows you to make lasting memories. You might also budget for “giving while living”. This is a great way to pass on your wealth during your lifetime and it can be incredibly tax-efficient.
Certain HMRC gifting exemptions allow you to pass on your money tax-free. This also has the effect of lowering your potential Inheritance Tax (IHT) liability, meaning your loved ones could be left with a smaller IHT bill.
You might find that giving your money away during your lifetime means that your beneficiaries receive the funds when they need them most. You’ll also still be around to see the difference your money makes.
You’ll simply need to incorporate gifting into your long-term estate planning. We can help with that, so get in touch now.
Get in touch
Contact us now to find out how our Chartered financial planners could help you.
Please note
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
