Worried about running out of money in retirement? Here’s how advice can help

It can be difficult to know exactly how much you’ll need to save for retirement. There are various estimates and calculations available online, often providing a figure for what it would cost to afford a “regular”, “comfortable”, or “luxury” lifestyle.

But even these figures don’t provide much insight, because they’re based on averages, rather than on as you as an individual.

As a result of this difficulty, many retirees fear that they won’t have enough to achieve their goals, and a large percentage are even concerned that they’re going to run out of money entirely.

This is Money reports that half of UK retirees fear they will eventually run out of money. Furthermore, a quarter of retirees are reliant on an inheritance to top up their income, with a third planning to downsize to a smaller home.

This is an area where advice from a financial planner can really add value. Read on to discover how, and why you might want to consider working with a financial planner.

Starting with your goals can help you work out what you need

Having an idea of what your retirement will cost is certainly a good place to start. By planning for a specific figure, you can ensure that you save enough throughout your career to afford that lifestyle, giving you the confidence that you’ll have sufficient funds in retirement.

This is where a financial planning approach can add value. Instead of starting with your money, your planner will begin by asking you about your lifestyle. They’ll want to know about you, your family, and what brings you joy and gives you purpose.

From here, they’ll help you figure out your goals for the future. Whether that’s travelling, starting a business, or providing wealth to your loved ones to help them with their own financial goals, this is your chance to figure out what’s really important to you.

Whatever you decide, these different scenarios all have a tangible cost. So, by using these as the starting point, a planner can then organise your wealth accordingly to help you achieve your targets.

Alongside helping you to work out what you need for retirement, this method can improve your ability to save money, too. Research from the University of Stirling found that setting goals is more likely to make you a successful saver – as does using professional financial advice.

So, by starting with what you want to do in life, you’ll give yourself an idea of what you’ll need, and be more effective in saving for that figure.

Advice can offer you immense peace of mind

A major benefit of seeking financial advice is the peace of mind it can offer. In fact, according to Financial Planning Today, over half of respondents in a survey of 1,000 investors said that peace of mind is the key reason they seek advice in the first place.

One way that advice can offer this peace of mind is down to the cashflow model your planner will create for you.

A cashflow model involves putting your personal financial information into software that produces a visual representation of how long your wealth will last during retirement.

This model can also take into account various shifting factors that could affect your wealth, such as inflation, interest rates, and investment performance.

This data-driven approach can offer immense peace of mind, as it can accurately show you how far your wealth will go in retirement. You can be confident that you won’t run out of money, because your planner can show you your assumed spending based on your ambitions.

Additionally, if the report initially reveals that the numbers don’t quite add up, this is the point at which your planner can make suggestions and recommendations with your wealth to help you stay on track towards your targets.

Adjusting your plan as your life changes

One of the most common retirement goals is to retire at 60, with the Independent recording 1 in 4 UK adults to have this aim. And, with Macro Trends recording average UK life expectancy in 2023 to be just short of 82 years, that means your retirement could last for more than 20 years.

Cashflow modelling can be instrumental in organising your wealth over this period. But what happens if your goals or circumstances change throughout retirement?

That’s why perhaps the most crucial advantage of working with a planner is that they can help you to adjust your financial plan over time, ensuring that it continues to fit who you are and what you want to do.

For example, you might:

• Decide that you’d rather pass more wealth to your family instead of travelling
• Become concerned that you’ll need to pay for the costs of long-term care
• See fluctuations, either up or down, in the value of your investments, and want to change your strategy as a result.

Whatever the reason, your financial planner can update your plan – and your cashflow model – so that it reflects your current lifestyle and ambitions.

This can give you the reassurance that you’ll have enough money for your retirement, no matter what happens.

Get in touch

If you’d like to have confidence that you’ll be able to live your dream lifestyle in retirement, we can help at Britannic Place.

Email info@britannicplace.co.uk or call 01905 419890 to find out what we can do for you.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate cashflow planning.

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.