Site Logo
Site Logo

Can you give me some clarity on my retirement plans?

28 September 2021

Got a question?We'll put your question to our panel of helpful advisers

Question by Tim

I use a financial adviser and have spoken to him about my retirement plans. I'm currently 52 and he has said that if I retire at 72, I can expect to take an income of £3,000 a year. My pot is worth about £100k - I can't work out the maths? I'm getting a bit frustrated but don't know what to do next.

Is it up to me how much I can take out of my pension if I wanted to take a lump sum? I've been advised I should take out less than I want. My adviser doesn't seem to take into consideration the assets I have in my house (I'm likely to downsize at some point).


Answered by Oliver McDonald

Hi Tim,

Thank you for your question and sorry to hear about your experience with your current adviser.

As I'm sure you can appreciate, it's difficult to answer your question without knowing more details but hopefully the information below helps.

First, it will depend on the type of pension you hold. If your pot is worth around £100k right now as you say, this would a defined contribution pension. New legislation was introduced in 2015 that allows you to access these funds using flexible drawdown so in answer to your question, yes it should be up to you how much you take out. Whether this is the right advice for your circumstances is something I cannot answer without knowing your situation and the details of your pension.

It would be interesting to learn why age 72 has been selected, as most people prefer to retire before this age.

In terms of the £3,000 at age 72, this does seem very low if your current fund is worth £100k. Especially if you're currently contributing, the funds are invested properly and you're not being charged too much. Perhaps your adviser is quoting an annuity at age 72 but this still seems low.

It doesn't sound as though your current adviser has taken into account your other assets/sources of income. Good financial planning should involve discussions around the lifestyle you want in retirement, how much this will cost and then use cashflow modelling software to demonstrate how this is achievable (or not). With cashflow modelling, you can take into account the downsizing of your property and other income like your state pension. This is all built into powerful graphs which show you, visually, how and when you can retire. And how long your funds will last!

In terms of your frustrations, you're always free to speak to another adviser. With the wonders of technology, a local adviser isn't always necessary. Feel free to get in touch.

I hope that helps.

Oliver

This answer is for information purposes only and should not be relied upon for advice. Please seek professional regulated advice

Answered by

Oliver McDonald

Director & Independent Financial Adviser

I have worked in financial services for 15 years gaining extensive experience in financial planning. I am a people person. You will rarely find me explaining complex spreadsheets or using jargon. I keep my conversations at a high level and realised early on that financial planning is all about helping my clients achieve the lifestyle they want in future. I work with individuals, business owners and entrepreneurs. I specialise in retirement planning, investments and business protection.