Financial planner to test my retirement planning?

QrizB

And it forecasts out until I'm 85

What position does it forecast you to be in when you get to 85?

If the worst-case outcome has you sitting on a pile of loot thast would make a dragon blush, all well and good. But if the worst-case sees you barely liquid at 85, maybe you want to extend the forecast a bit further?

UrbanAchiever

Thanks for your replies in terms of the online software that can be used. I'll take a look at them.

UrbanAchiever

https://forums.moneysavingexpert.com/discussion/comment/81929657#Comment_81929657

I've got a good idea of what I'll do when I retire, and if I get bored, I am open to doing some non-exec work, along with some charity work.

UrbanAchiever

https://forums.moneysavingexpert.com/discussion/comment/81929703#Comment_81929703

Thanks for your reply. That's essentially what I'm thinking I'd do. Present them with my situation and have them build their model, with stress testing.

UrbanAchiever

https://forums.moneysavingexpert.com/discussion/comment/81929741#Comment_81929741

My wife and I own 2 rental properties. The rental income is very nice, but the yields aren't great due to the rise in the value of the properties over the 15 years that we've owned them. So my plan is to sell one soon after retiring (once I'm in a new tax year with no income) and the other a number of years later. I don't want all the hassle of renting them out when I'm older.

I'm very comfortable with holding stocks and bonds, but am always open to an annuity if they are priced right.

UrbanAchiever

https://forums.moneysavingexpert.com/discussion/comment/81930172#Comment_81930172

That approach is something I'm considering - seeing how it goes with the potential new manager, but with the knowledge that I can hand in my notice if she p!sses me off!

UrbanAchiever

https://forums.moneysavingexpert.com/discussion/comment/81930191#Comment_81930191

Assuming 3.5% inflation, 4.5% return on investments from the moment I retire, a gross "income"/spend of £75k pa (increasing in line with inflation by 3.5%), reducing by 20% at age 75, leaves me with £267k at age 85, along with 2 full state pensions for my wife and I, plus a DB income of £21k pa. In reality, I'm highly unlikely to spend that much each year - we live very modestly, but I'm looking at a worst case scenario.

If investment growth is 5.5%, then the figure is £1m at 85. A massive swing, but a feature of 32 years of compounding. Either that or my spreadsheet is faulty and I need a professional to run the numbers!

Not factored into any of this is inheritance. I have never relied on it and it doesn't feature in these sums, but I am currently in my dad's will, which will see me inherit 1/3 of his estate. I am power of attorney for him and manage everything for him (savings, investments, any other decisions), so will know if he cuts me from it! He is in a care home. Allowing for those fees, I anticipate my inheritance will be in the region of £400k after IHT, depending on how long he lives.

poseidon1

With your varied asset base and different income sources, you fit the profile of someone who could benefit from the services of a qualified Chartered Financial Planner.

Only around 5% of UK IFAs are qualified at that level, and CFPs have a far higher level of competency in tax planning matters as well as retirement modelling . You may wish to use the following search engine to locate a suitable adviser.

https://www.thepfs.org/membership/find-an-adviser/

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81930793#Comment_81930793

I also plan to sell my rental at some point, but I find the convenience and consistency of rental income very welcome. So until it becomes a real chore it's a very nice diversifier. Having the DB pension and eventually SPs makes your retirement income planning a lot easier - if your investment withdrawals don't need to be very large then you have a massive advantage over lots of people. Something you should consider is some IHT planning. You might want to have any inheritances you are expecting from your parents actually skip a generation and go to your children and also look into gifting strategies.

UrbanAchiever

https://forums.moneysavingexpert.com/discussion/comment/81930897#Comment_81930897

You're right, it is very helpful to have different income streams in retirement. This is something I need to bear in mind.

And on IHT, I agree and will certainly look at a deed of variation to direct my inheritance to my kids. If my investments perform in line with how they have over the past 22 years (7.95% average annual return), then my age 85 figure will be £4.7m! Of course past performance is no guarantee of future performance and in my view is VERY unlikely, especially with sequence of returns risk in retirement.