6 mistakes to avoid during retirement

Planning for retirement can be complex, as anyone nearing the end of their working life will tell you. Yet, navigating the myriad of choices, both socially and financially, doesn’t have to be such a mystery. Here are a few tips to help you avoid common mistakes that retirees often make:

1. Failing to have a plan

Many retirees have several streams of income to provide for them during their retirement. Making the most out of those revenue streams is vital to a stress free retirement, as imprudent investment or inadequate planning can lead to unnecessary worries. We recommend getting in contact with a local financial adviser in order to set out a plan that’ll let you focus less on worrying about income and more on enjoying your well-earned retirement.

2. Spending your pension fund first

If you put back spending your pension fund and exhaust other available cash and investments first, you could keep more of your money sheltered from the taxman. Not using your pension fund until you have to could help the beneficiaries of your estate avoid inheritance tax (IHT).

3. Not taking advantage of the concessions

There are a huge number of price reductions for pensioners over a certain age. This ranges from reduced prices of cinema tickets to discounts on train fares. If you’re at or in retirement, we recommend you take full advantage of these discounts as every penny saved provides greater financial security for yourself and your family.

4. Letting your heirs take the full brunt of IHT

IHT can cost your loved ones a vast sum if you were to pass away. There are lots of ways to safeguard your assets and protect your beneficiaries from losing out. Planning to leave assets to your spouse or making gifts are effective ways to avoid the tax, among other valuable strategies.

5. Believing property is the only asset worth owning

Property can be an important source of retirement income, but it’s not the only way to generate extra income. Property can frequently incur maintenance expenses, whilst dealing with tenants can take up valuable time that could be better spent making the most out of your retirement. As with most investments, though, there are pros and cons to investing in property.

6. Getting scammed

When you sell your business or give up work, it seems that all manner of people suddenly become experts, start making claims or want to offer you a “great” investment opportunity. Ploys can consist of unexpected contact with promises of high (or guaranteed) returns and pressure to make decisions fast. The Financial Conduct Authority’s website has a ‘ScamSmart’ page that’s definitely worth a look (https://www.fca.org.uk/scamsmart).

The Financial Conduct Authority does not regulate tax advice. 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. Any reference to tax treatment depends on the individual circumstances of each client and may be subject to change in future.

If you have any questions around this topic, please feel free to get in touch with us directly on 01789 263888 or email hello@charterswealth.co.uk.