For those who have been saving for retirement for years and were planning on retiring imminently, the Covid-19 crisis will be a major concern. Market performance has been volatile which has created anxiety for a lot of people around their possible future income from their pension if the total value has fallen.
While there is no clear end in sight for the pandemic, the markets are beginning to stabilise.
Below are some tips for those who are concerned about retiring:
Stay in employment for as long as possible
If you can, you should delay retiring if possible. The closer you are to retirement, the bigger an impact Covid-19 will have on your finances.
You could transition to working part time and phase into retirement gradually. Retaining some of your job income will give your pension assets more time to recover.
Monitor your pension savings
The speed that your pension savings recovers will depend on your underlying investments and assets. If you have a high exposure to property or UK equities, your pension will take longer to recover.
At Four Wealth Management, a Financial Adviser will be actively monitoring your pension savings and investments to make sure that they are suitable for your individual circumstances. They will recommend changes to your portfolio where necessary.
Understand your investments
A pension is to provide you with income in retirement. Your funds are invested with the possibility of growing over the long term however it is important to remember that there may be market volatility and that the value of your funds could go down as well as up.
It is important that you understand the risks involved when investing and choose investments that are suitable for your appetite to risk. If you are young and just starting to invest in your pension, you have a much longer time period so are likely to be able to take more risk as your investments have more time to grow and recover as markets move. If you are close to retirement, you should review your existing investments and check they are still in line with your goals and potentially consider changing your investments to lower risk options.
At Four Wealth Management, our Financial Advisers will work with you to determine which investments are most suitable for your circumstances.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
Speak to a financial adviser
Since the pension freedoms were introduced in 2015, savers have more control over their retirement income. A Financial Adviser can work with you to determine how much you can withdraw each month to maintain your standard of living while keeping your remaining pension funds invested to hopefully benefit from further growth.
Taking expert advice can be invaluable and help to prevent your pension funds running out too early.
Book a no-obligation financial review meeting today on 0117 973 0500.