How much retirement income are you going to receive from your private pension plans?
Don’t know? Well you are not on your own by any means.
Experience tells me that there are two good reasons (not good excuses for inaction by the way) why you may not be able to answer my question.
The first reason is that your pension provider probably sends to you, once a year, a statement.
That statement contains a valuation of your pension plan and an illustration of the possible benefits that you might get from your plan when you reach something known as your “selected retirement age”.
The illustration will not be easy to understand. It will be based on a raft of assumptions about the future and indeed about you.
It will not be stimulating enough to encourage you to, stop doing the gardening, watching Wimbledon or the World Cup, or popping down to the local for a relaxing evening with your mates, to read and understand it.
You might take a cursory glance at it and then pop it back into the envelope sort of promising yourself that you will take a closer look at it “when you get a moment”.
If per chance you meet some one like me for a discussion about your retirement planning I will ask you a load of questions and (only slightly embarrassed) you won’t be able to answer them.
I might ask you who your pension plan provider is. You might know or you might say something like “Oh, it’s that Scottish company”.
If I ask you in which investment funds your pension plan is invested you probably will not know the answer. If I ask how you selected the investment fund(s) you may start to avoid eye contact with me altogether.
This is not your fault.
For most normal human beings, pension plans are boring. Most of the material produced by pension product providers is both boring and infrequent (once a year for example) and full of jargon.
The second reason is that the chances are you have had a variable career changing jobs a number of times during your working life. As a result of those changes you may well have accumulated a number of different pension plans.
Repeat the statement exercise I described above for however many pension plans that you have.
If you tried to read all of the statements at the same time to try to get some kind of global view of what you have, it will probably drive you crazy!
Oh and if you tried to work out the overall investment structure of your various plans that would accelerate the path to insanity!
So there are two ways that you can answer the question “How much retirement income am I going to receive from my private pension plans?”
You can read the statements or you can employ me and I will read them (and translate them as well) for you.
You can then go back to the gardening, the pub or wondering why England can’t play football like Brazil or Argentina.
You choose.
