Britannic Place Financial Management Limited

What do you need to do if you want to change your retirement plans?

When you’re planning for the future, a lot of the discussion is about setting goals. This is certainly important, as having a target for what you want to achieve can help to focus the way you manage your money.

But what happens if you change your mind? What do you do if you suddenly decide that you have different goals for your retirement?

Here are the things you should consider if you want to change your retirement goals, as well as milestones for when you might want to reassess.

Figure out your new goals

Just as when you created your initial plan, your first step is to decide exactly what your new goals are.

Have you decided that you want to stop working earlier than planned to make the most of your retirement? Or have you had the sudden realisation that you’d like to see as much of the world as possible?

Perhaps you’ve even decided that you want to stay working in your family business a couple of days a week to help oversee things?

No matter what your goals are, start by figuring out your concrete targets. From there, you can start working out how much you’re going to need, and what you’re going to need to do to your finances to get there.

You can also design a new timetable for when you want to achieve your new goals and how much you’ll need by each stage of your life.

Reassessing your finances

Once you have your goals and a timetable for when you want to achieve them, you then need to see how well-equipped your finances are for your new plan.

Three key areas that you might want to consider reviewing are your savings, your pension and any other investments, and your mortgage.

Savings

The first place you’ll want to look is your savings. There are two main areas you want to be looking at here: your emergency budget, and your regular savings plan.

Your emergency budget is your safety net in case you ever need cash to cover you in unexpected circumstances.

There’s no hard and fast rule for how much you should have in your emergency budget, but a good estimate if you’re at retirement is to have one to two years’ expenses available.

Of course, this is a crucial figure to review if you’re changing your plans, as your expenses may now be greater and so you’ll need a bigger fund.

You should also review any other savings you have. Are you saving enough to support your new plans? Or are you even saving too much in cash when you could be using it somewhere else more effectively?

Make sure that your savings are suitable for your new plans.

Pension and investments

Your pension and other investments are your next port of call for review when you want to change your plans.

You need to make sure that your investment strategy is still suitable for what you want to achieve. This may include making sure that your contributions into your pension are still sufficient for your needs, or perhaps even checking that your risk profile matches your new requirements.

No matter what you decide to do, it can be helpful to run your plans past a professional, especially when making changes to your pension.

Mortgage

Mortgages are an area that you might not have considered in your plans, but they could be highly influential on your retirement.

For example, your new retirement goal might be to retire earlier. However, you may have a mortgage with terms that run past age 65, meaning you’ll need to keep paying it after you retire.

This could see your mortgage put pressure on your pension and any other available retirement funds. As a result, you need to be sure that you can still afford your home loan repayments alongside your new goals.

Equally, mortgages could still yet play a part in your retirement. If your plans require a small windfall of cash, perhaps you could consider an equity release product so you can use the tied-up value in your home.

Bear in mind that equity release can affect your eligibility for state benefits and also affect the value of your estate.

Work with a financial planner

Realistically, when you’re making financial decisions like this, it’s often sensible to work with a financial planner.

A planner can look across your finances and help you work out whether you can afford your new plans. Crucially, they can then suggest and implement strategies to help ends meet if they don’t quite add up currently.

If you’re considering changing your retirement plans, or you need help setting some goals to focus on for your future, then please get in touch with us at Britannic Place.

Email [email protected] or call 01905 419890 to find out more about how we could help you.

Please note

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Buy-to-let (pure) and commercial mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home.

Equity Release will reduce the value of your estate and can affect your eligibility for means-tested benefits.

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