You will worry about money in retirement because:
1) You will not invest enough on a regular basis.
2) You will not take the appropriate amount of investment risk at the right time.
3) You keep putting off looking at your finances.
4) You don’t trust investment professionals to advise and manage your money on your behalf leading to costly mistakes.
5) You have no plan for your wealth so don’t know how long it will last.
6) You haven’t given enough consideration of what retirement will look like for you.
7) You don’t discuss money with your partner and so have different objectives.
8) You don’t use tax breaks that are (legally) available to you.
9) You feel obliged to support your children even though they flew the nest long ago.
10) You will purchase an annuity from your incumbent pension provider rather than considering your options.
11) You will rush to take money out of your pension come April 2015 without consideration for the real costs.
12) You blindly follow the financial press’ share/fund tips without consideration for whether they are appropriate for you.
13) You see property as the investment panacea and ignore all other asset types.
14) You were burnt once by a stock market crash and so now avoid investing in them at all costs.
15) You get hooked into marketing hype about an investment that gives high returns with no risk but it turns out to be the opposite.
16) You don’t review existing investments so don’t know they are poorly performing and/or expensive.
17) You don’t review your spending and are paying for things you don’t need or value without knowing it.
18) You believe “cash is king” but ignore the effect of inflation on your wealth.
19) You will follow the herd and “buy high and sell low” when investing.
20) You will choose a financial adviser whose sole motivation is making money from you rather than for you.
And what you can do about it:
1) Start planning early enough (at least ten years ahead of your intended retirement date)
2) Take time to think about what you want to get from retirement and when you want it to be.
3) Talk to your partner to understand their motivations and wishes.
4) Review your current financial position and what you expect it to be in the future (income versus expenditure and assets versus liabilities).
5) Forecast how long you expect your money to last based upon your current position and expectations for the future.
6) Consider how much risk you are willing to take with your money and what impact this will have on your long term wealth.
7) Regularly save as much as you can (this may mean you have to prioritise long term financial security for short term luxury items).
8) Use tax allowances that are available to you (pensions and ISAs being the main ones).
9) Invest in a broad range of assets according to the risk you are comfortable taking.
10) Make sure you don’t over pay for the cost of investing (total costs of over 1.5% pa would be expensive).
11) Be clear on all of your options, especially at the point of retirement, so you don’t make irrevocable decisions.
12) Review your position against your objectives on an annual basis.
13) Engage the services of a financial planner who you are comfortable with and who focuses on you and your retirement objectives.
