If you’re about to enter retirement or have been retired for a few years, it might be tempting to think that financial advice is something you will no longer need.
Indeed, many people intuitively feel that the true value of a financial adviser appears earlier in your life, as you are accumulating wealth via investments and look for help in navigating this. Yet is that really true? Is there any value in financial advice in your 70s and beyond?
Whilst retirement is a huge “end goal” for many people when it comes to financial planning, it certainly isn’t’ the “finish line”. Life tends to go on for several years or even decades once you finish employed work, yet that does not mean the challenges of wealth preservation, growth and money management go away.
Regardless of your retirement income or wealth status, our belief at Cedar House is that there are few better times than during retirement to draw upon the wisdom and skills of a financial adviser. You just need to ensure that you find the right adviser for you.
Let’s look at four reasons why retirement is an important time to consider financial advice:
#1 The stakes are higher
Most of us go through our lives and make various financial mistakes at some point. Perhaps you buy an overly-expensive car on finance, which you later regret due to high monthly payments which stop you from saving. Or, maybe you took out a loan and took longer than you should have done to pay it back.
Fortunately, earlier in life, it is easier to recover financially when you make these kinds of mistakes. You still have many years and decades of employment, during which time you can change course and get yourself back on the right track. When you approach and enter retirement, however, the stakes are much higher. You no longer have the same time or means to correct a mistake.
We don’t say this to make you panic. Only to highlight the importance of independent financial advice at this stage of life. Remember, this money that you have saved up for retirement needs to last for the rest of your days. So it’s vital that you weigh up every possible option and get a qualified, experienced set of eyes to look over your strategy and ensure that all possible scenarios are covered, in order to carry you safely ahead.
#2 Keeping things on track
Suppose you have worked with a financial adviser leading up to your official retirement date, in order to sort out your wealth and establish your financial goals for the coming years.
Once that date passes, can you now sail away gracefully – leaving your adviser behind and simply letting your plan carry you forward?
Of course not. At this point in our lives, after spending many decades walking the earth we all know that even the best-laid plans can run aground if they are not checked regularly, and updated in light of current events and changing circumstances.
This especially applies to retirement planning. Whilst it is hugely important to seek the counsel of a financial adviser when drawing up a retirement plan in the years leading up to finishing work, it would be a mistake to leave things there.
For instance, in most cases, retirement plans feature pensions as a source of income – which are tied to various investments. These investments might go up as well as down during your years of retirement, possibly causing your financial plan to veer off course if left unattended.
A financial adviser can offer value here by continuing to monitor your investment portfolio and financial plan, notifying you when corrections need to be made in order to get you back on track towards your financial goals.
#3 Events transpire
After you retire, many things can happen which have a big impact on your life and finances.
For example, perhaps you and your spouse live comfortably and healthily together for many years before one of you, sadly, needs to enter full-time palliative care (which can involve care home fees of tens of thousands of pounds per year). Or, perhaps the tax system changes dramatically during your retirement, which means you need to revisit your financial plan in order to optimise your income and protect your assets.
Certainly, a good financial planner should have helped you account for situations like these when you drew together your original retirement plan. Yet even the best financial plans cannot fully cover every possible scenario in your retirement, and sometimes several events come together all at once which might involve coming up with a new, temporary plan to see you through a period of uncertainty. A financial planner will be able to help you through this.
#4 Trust should be cherished
At this point, you must understandably be thinking: “If X or Y event comes up during my retirement, I’ll just get in touch with a financial adviser at the point when I need them. I don’t need an ongoing relationship.” Yet we would caution strongly against this.
Never underestimate the value of a competent, truly independent financial adviser when it comes to helping you with your wealth and finances. Given the high stakes involved with your money, it would be difficult to overstate the importance of having a trusting, long-term relationship with a professional who you know has your best interests at heart.
We are all aware that many people become more vulnerable as they get older, which can make it hard for you to distinguish a suitable, competent financial adviser from an inexperienced or possibly ill-intentioned one. However, by establishing a good relationship with a trusted adviser earlier on and keeping that relationship going well into your retirement, this person is there when you need them and you don’t need to worry about finding the right person to help address a problem, worry or issue you have encountered.