“I was approaching retirement and I needed guidance. That’s what they gave me.”
Having a plan
You spend much of your life building the capital that will provide for your retirement and leave a legacy for your family.
Knowing how much you can draw out without running out of money later in retirement is critical. You also don’t want to be too cautious early in retirement and then find out too late that you could have done so much more. Singapore Airport at 3:00 am on a changeover aged 88 is probably not desirable.
Withdrawing money smartly
You also need to consider the legacy you leave behind for your family. Investment capital forms part of your estate and is assessed for Inheritance Tax and long term care funding. Money in your pension is held in Trust for you and your family, and is therefore outside your estate. It is therefore often better to use investment capital and reserve your pension capital for later years, and for any legacy your leave.
Investment risk
When you are building capital a big investment loss often means you simply buy cheaper units as you continue to save and you can actually gain from the loss as long as prices recover.
When you are wanting to draw funds out to live on then investment losses become destructive because further withdrawals come from depleted funds and can quickly erode your capital base.
Avoiding investment losses can then become more important than making gains. This is where our investment strategy [link to strategy] is so valuable for clients with capital they need to live off.
How we can help you
Having a clear plan is essential. That’s where our Wealth Management Service and in particular our cashflow forecasting is critical to planning your finances so that you can do the things you want to.
There are a huge range of tax-free allowances and it is important to draw money from the right places to minimise taxation. This is where investment platforms that hold your investment and pension capital come into their own. Clients email us for funds and we check the withdrawal against the cashflow forecast to see if it has any impact on the future. We then consider the most tax efficient place to draw the capital from, before implementing the trades to raise the funds and the platform then pays the money into your linked bank account. All done normally within 5-10 working days of the original request.