Financial advice will help to boost retirement savings
Retirement savings have often been overlooked by younger people, however, it’s when you are young that you really need to start looking into it.
A survey undertaken by unbiased.co.uk and AXA Life Invest confirms what I have always spoken about and have always known: that those individuals who seek advice from a recognised and trusted wealth management professional will be financially better off in retirement.
The results highlighted that those who sought financial advice relatively early on in their working lives saved an average of £98 per month more into their pension pot than those who decide to “go it alone” when it comes to retirement planning. This extra amount would result in an additional income of £3,654 per year based on a £100,000 pension pot.
The figures also showed that if average retirement savings grow by 5% a year between the ages of 40 and 65, then your pension pot will be £63,595 more than an individual who hasn’t taken steps to increase their retirement savings.
What the results of this survey highlight are that it is never too early to start planning and saving for retirement. If the financial advisers polled, they were confident they could boost individuals’ retirement income if they sought advice at least 15 years before they wished to start drawing their pension.
Many younger people make the decision to delay preparing for their old age and investing in retirement savings. This is because they presume their earnings will be greater later on in their careers. However, in my experience, I believe that younger individuals can have more disposable income. Younger individuals are less likely to have children and have the responsibility of maintaining the family home than older people. Meaning that they may find it easier to put funds aside for retirement.
More and more people are spending a third of their lifetime in retirement but not thinking of their retirement savings. Putting as much money aside as possible is crucial, particularly as living costs, medical and care expenses and taxes are on the rise. Retirement is far too important to leave to chance. A ‘head in the sand’ approach could result in potentially devastating consequences, particularly as there is a high improbability that State-funded pensions will be available for future generations.
What is the ideal situation for retirement?
To enjoy an active and financially secure retirement. But unless you put money aside during your working life, it is likely that you’ll need to drastically reconsider your retirement plans when you hit 65.
This is why the role of the independent adviser in financial service and wealth management is becoming more crucial than ever. This is why retirement savings planning forms an integral part of what I do.
About Mike Coady
Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.
Mike is an award-winning money coach and industry leader in the financial sector.
Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), and a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.
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Blog published by Mike Coady.