Help with those later years
Are you Retirement Ready?
There are many aspects of Later Years and Estate Planning that should be thought about by those coming up for retirement.
But getting to retirement is not the only consideration; what happens once you are post-retirement is equally as important.
This guide will help you look at retirement as a journey starting with At Retirement Advice and leading into Later Years Asset and Financial Planning
At Retirement Advice
So why do people access financial advice at the time when they are due to take their pension?
The simple answer is that a person’s retirement decisions need to be considered alongside options available to them, depending on needs and circumstances.
Can I afford to retire?
How do I retire?
There are many products and options, all of which an independent financial adviser can explore, without being tied to advising on only a restricted number of products. Here are some options:
At Brighter Financial Services our advisers carry out cash-flow modelling, to ensure that a client’s expected income in retirement is sustainable throughout the retirement years.
The adviser will also look at other forms of income to make sure that the client is able to retire in the most tax efficient way possible.
What does my retirement look like?
A client’s circumstances may mean that, due to ill health, for example, they wish to retire now with more money to experience the world and enjoy themselves, than having the most amount later.
Receiving a flexible retirement income in these circumstances would be right for the client.
- Fixed term annuity – set income over fixed
period of time
- Lifetime annuity – similar but over lifetime
- Scheme income – associated with final salary
- Full uncrystallised Fund – Pension lump sum –
Taking pension out in full with 25% tax free and
75% subject to tax
- Partial uncrystallised Fund pension – Some
providers allow a portion of the pension pot to
be taken so that part of the income can benefit
from the personal allowance.
- Flexi-access drawdown – allowing the client
to take the tax- free cash without taking the
Later Years and
Once in retirement, there are other areas to consider as we approach life in older age. Changes in living circumstances, ill health and living alone, can all become a reality which we, unfortunately, have to face.
What do I do if my partner dies, how do I afford to live?
Pension nomination. It is vitally important that you have identified a beneficiary for your pension so that it does not have to wait to be gifted via probate, which can be costly.
Planning this stage of life, financially and from an estate management perspective, can make these years easier to navigate.
A Wills Specialist and Independent Financial Adviser can consider the following on your behlaf:
Insurance – Term or whole of life. Can the mortgage be paid off? Does the partner have enough to live on alone?
IHT planning – benefitting from £325,000 per person IHT allowance plus primary residence relief up to a further £175,000 per person (from April 2020)
If you and/or your partner are above the threshold we would advise how to gift monies or write monies into Trust etc.
When should I make a will? Do I need LPA’s?
You should make a will as soon as you have dependants and assets that you wish your loved ones to have on your death.
If you haven’t already made a will, the later years are definitely a time when this should be considered. Some of the problems in dying without one are:
- It is much more complicated to administer the estate without a will and the law effectively decides who inherits the estate
- If you do not have any
relatives who can inherit
your estate you may wish to
leave the money to charity, but cannot do this unless your wishes have been expressed in a will
- Your inheritance could be a real life-line to your loved ones who would really benefit from having support from your estate
Lasting Powers of Attorney
If you haven’t considered LPA’s now is very much the time to do it, as the donor (person making the LPA) must have mental capacity in which to be able to grant someone else the right (attorney) to make health and financial decisions on their behalf.
We use a will’s have seen cases where young people have been left without physical or mental capacity where, in the absence of an LPA, decisions about their health and
financial affairs have been left to the Courts which can be long drawn out and costly.
Executors of wills are different from LPA’s and cannot deal with health and financial decisions on your behalf during your lifetime. As most people do not just die but have an illness before-hand, which could leave them incapacitated, it is wise to consider having LPA’s in place.
Long term Care
Clients need to be realistic about what can and cannot be achieved in protecting assets from consideration by the Local Authority for Care Costs
If a person is seen to be “deliberately depriving” the LA of funds that could go towards the care of their loved ones, they could face having to pay for care costs anyway.
What is reasonable to do is to change the way in which a property is owned from joint tenancy to tenants in common.
Tenants in common can make decisions as to whom to gift their share of the property, usually via a Trust, and have this written into the will as to who the beneficiary should be on their death.
If you are coming up to retirement or have not made a plan about your future years and are already in retirement, speak with our partnership team at Brighter Financial Services and our wills service partner.
We look forward to providing you with a simple and clear solution for all your retirement needs.