IFA for pension advice

Nebulous2

chrispies2020 said:

 Nebulous2

That sounds extremely useful. I can certainly see how I might be able to employ these threads to usefully understand where I stand. I suppose - being already  in my 60's - I also realise there are limited options for me to change what I can 'achieve'.

Certainly its been an interesting discussion for me. If nothing else it makes me realise how few and how uncertain the choices are for so many of us in retirement.


Thanks

Here are the two threads.  

How much to live on — MoneySavingExpert Forum

Pensions Planning: The NUMBER — MoneySavingExpert Forum

The biggest issue for many people is that they want to retire before state pension age and need to fund that gap. If you are already 60 and intend to work for another four years or so, then that gap will be relatively small. I stopped work at 59, with 8 years to fund, but quickly took a part-time job, which has helped both my mental transition from committed worker to retirement and has also helped preserve my capital / savings as well. 

Points to consider: -

You should carefully consider how much of your money to keep in equities and how much in something less risky. Equities have outperformed over the long-term, and when you want to retire in 4 years you may think you are looking short-term.  While your capital may take a hit in the first 2-3 years, some of it may remain invested for 20-30 years. You'll need to live on something prior to two state pensions kicking in, but once they do, that and your previous occupational pension may meet most of your basic needs. So you can afford more risk with money you will need at 90, than the money you will need when you stop work. 

Many people overestimate what they will need in retirement. Horizons narrow, ambitions fade, and spending a lot of time and money on travel becomes wearisome. 

The choices you see may be few, but they are still there. You are in a better position than many. I can't remember the average DC pension pot, but it is in the low tens of thousands, rather than the £180k you have. We tend to live in a bubble here, because we are surrounded by savers who have been planning for retirement for a long time. That isn't representative of the rest of the world. 

I haven't used an IFA, but being on here has helped me clarify my own place in the world. I also like simplicity - much retirement planning can be reduced to 

How much do you need? 

How are you going to get it? 

If the two don't match, are you prepared to temper your ambitions by working longer, or stop when you want to but live on less? 

Life is often about compromises, that applies in retirement as well as other areas. 

boingy

Sounds to me like you don't need an advisor.

I'm still looking for an advisor that can tell me how much longer I will live. That would make the financial planning much easier...

Albermarle

I haven't used an IFA, but being on here has helped me clarify my own place in the world. I also like simplicity - much retirement planning can be reduced to 

How much do you need? 

How are you going to get it? 

If the two don't match, are you prepared to temper your ambitions by working longer, or stop when you want to but live on less? 

Being a bit of a 'back of a fag packet' man myself, I agree you can overcomplicate things. On the other hand it is useful to understand a few things about investments/pensions/tax, that the average person in the street would consider complicated.
Also regarding your last sentence you can see from some other posters on this forum, there is another point to add.
Some are prepared to retire with 'just enough' especially if they hate their jobs. Often they will have a 'well I might go under a bus tomorrow' outlook on life.  Whilst others stay at work for years longer than really necessary, adding more to an ever growing pile of money that they probably will never need. So your personality comes into play as well.

chrispies2020

Morning

Nebulous2 - yes, I tihnk this sounds like the sort of 'sensible' approach I may need to take. With the advice from my IFA, what confused me was the the proposal to supply on going management of my money. This *sounds* like a good thing, but I cannot fathom what good it will do or how it will work. The upfront cost runs into thousands. Given recent falls in the value of my private pension, this is hard to come to terms with.

'I stopped work at 59, with 8 years to fund, but quickly took a part-time job, which has helped both my mental transition from committed worker to retirement and has also helped preserve my capital / savings as well.'

You sound like you have taken a considered and pragmatic approach to retirement. That suits me well. As I mentioned earlier in the chat, we already live a relatively simple existence with just a few treats to stop life becoming very dull and miserable. This suits us well. What I am wary of with is the promise of large investment rewards to fund extravagent lifestyles. If it sounds too good to be true, it probably is.

I am  considering just one part of the proposals from my IFA - which is to review my existing pensions in the hope of preserving the savings within them. I am now thinking that on going management is not suitable for my needs.

Its interesting you mentioned the 'mental transition' to retired life. I also have found that tough to come to terms with. I think its worth noting that all the financial cosiderations we face can have a significant impact on mental well being. That has certainly been the case with myself.

xylophone

What is your wife's situation with regard to private/state pension?

Will you reach SPA at much the same time?

chrispies2020

No - my wife is 5 years younger than myself.

Bostonerimus1

chrispies2020 said:

Beddie -

I suppose its a question of trust. What I would prefer is to have something solid on which to make a decision.

I don't seem to be able to find this, which is why I posted. If I could generally discover whether IFA's have done a good job for other people, then it would be much easier for me to go down the route of signing up to financial management of this kind. But so far the whole area seems entirely speculative. As I said previously - its completely opaque to me with many options but no idication which to take.

I am not alone in thinking this. Everyone I speak to is in the same boat. Trying to make the best decisions, but completely unsure if they are doing so.

 

It’s hard to gauge IFA performance because the people that use them don’t have the same expectations or, usually, knowledge as the DIYer. They will probably outsource portfolio construction and you’ll often get some “optimized” portfolio with a smorgasbord of funds, and if you are ok with the mechanics of your finances then I’m not sure they would be worth the fee. If you have the knowledge and desire to DIY the do it. If you don’t want to spend that if time then you need to find a competent IFA that you trust. I think it’s easier to DIY.

xylophone

No - my wife is 5 years younger than myself.

Has she obtained a state pension forecast?

Does she have her own private pension provision and if so, is it DB/DC/both?

Nebulous2

chrispies2020 said:

Its interesting you mentioned the 'mental transition' to retired life. I also have found that tough to come to terms with. I think its worth noting that all the financial cosiderations we face can have a significant impact on mental well being. That has certainly been the case with myself.

I've worked in care almost all my life, and felt a sense of purpose in what I was doing, it appeared to me at least to have some value. I didn't really intend to retire early. I spent a year during the pandemic in daily contact with people who had been badly impacted by Covid, and it was grinding me down. I did my sums, decided I could afford to retire and stopped. 

I very quickly decided I wasn't ready to retire and took a part-time job with the NHS. I've reduced my hours and normally work one day a week, unless I'm covering leave or sickness. After 40 years of full-time work I wasn't ready for that sudden stop. The money has been welcome as well. I'm earning roughly the equivalent of a state pension, so it gives a trial of what my funding will be like when that kicks in. 

We talk a lot about the money aspect here, less about the psychological one, which is understandable given it is a personal finance website, but making that mental adjustment is also important. I liken retiring to jumping off a cliff. I've clambered down to a ledge half-ways down to lessen my fall.... 

jaypers

I have a face to face meeting with my IFA every 6 months. There are so many different options with pension savings that I feel it is important to understand these and really get to the nuts and bolts of what suits you personally. I also like the reassurance that what I am doing still suits my needs and be able to discuss, consider and make any tweaks as time goes on. Really works for me have an expert to bounce off rather than trust my own thoughts. IFA also answers any emails etc same day if ever I need anything.