Retirement is a major life transition which is unfortunately often associated with reduced productivity and personal and financial vulnerabilities. Clients often appreciate the need to plan for retirement, particularly in relation to their finances and perhaps less so for post-work roles and activities.
There is an increasingly complex environment in which individuals must manage their financial affairs successfully to provide for retirement. For example, the continually shifting landscape of pensions legislation in Ireland including plans for Auto-Enrolment and IORP II, annuities and interest rates falling significantly, and the continued impact of the pandemic.
All this makes financial and retirement planning more challenging.
An individual’s retirement transition will be unique to them. Notwithstanding the broad range of personal experiences, there was broad consensus in a UK study on retirement transition* that there are three elements that constitute a ‘model’ or ‘ideal’ retirement transition:
Choice and control over the timing and mode of exit from work,
Your employer’s attitude to retirement, including gradual and flexible retirement options,
Having access to the proper resources (including financial planning expertise) to prepare for the event.
Female participants in the study mentioned the inadequacy of their retirement finances, reflecting gendered work experiences of lower pay and interrupted careers due to caring responsibilities. Many partnered women had pensions that did not ‘pay for any standard of living’, but who were financially adequate when their partner’s pension was taken into account.
Clearly financial security, preceded by financial planning, is a cornerstone for a comfortable retirement and many clients will begin this financial planning process in the years immediately preceding retirement.
However, financial planning alone is often insufficient to experience a smooth shift into retirement. Organisations such as the Retirement Planning Council of Ireland provide support, information and guidance to people planning for retirement, offering practical courses and seminars that explore both the financial and lifestyle changes retirement can bring; to help you prepare for the time ahead.
As we are a Retirement and Financial Planning firm the future blogs in this series will examine mostly the financial aspects of your retirement planning, and how we help clients navigate their retirement transition. We do not ignore the other non-financial aspects of your retirement plan – indeed, your lifestyle objectives in retirements should underpin the financial plan at all times.
As always, we are here to help with preparing for retirement. If you have any questions or concerns about your retirement plan, contact Harvest on 01 237 5500 or email justask@harvestfinancial.ie and we will be happy to assist.
This marketing information has been provided for discussion purposes only. It is not advice and does not take into account the investment needs and objectives, financial position, risk attitude, liquidity needs, capital security needs and/or capacity for loss of any particular person. It should not be relied upon to make investment decisions.
