The Life of a Dental Technology Student (Part 9 of 10). By Richard T Lishman

Planning Retirementfor

By Richard T Lishman Managing Director of the 4dentists Group of companies

Richard Lishman, award-winning Founder of The IFA’s – a specialist firm of Independent Financial Advisers that provides guidance and advice for some of the wealthiest individuals and businesses in the UK and around the globe – heads this series of editorials for lab technicians.

THE LIFE OF A DENTAL TECHNOLOGY STUDENT

(Part 9 of 10)

Previously, our character, Bridget Crown, made the decision to sell her business. Now, as she takes a less active role and comes to the end of her career, she’s looking towards retirement. Making the decision to retire is never easy, and there are many financial aspects that Bridget will need to consider along the way.

THE FUNDAMENTALS

Ultimately, when we retire the goal is to have enough income to live comfortably and enjoy the lifestyle you want for the rest of our days. In order to achieve this, Bridget will have to start planning for retirement early, especially if she wants to maximise the income she will receive.

So, where to begin? One smart first step towards retirement that she should take is to look at her current pension, investments and other financial assets and calculate what her projected income will be at retirement.

This will give Bridget a good overview of the sort of capital she will be living off, and sets the stage for her to make any necessary changes to help boost this figure if she so wishes, especially if the amount is less than she expected.

Pension policies

Pension policies should, if possible, be reviewed at least annually to ensure that they are performing well and are fit for purpose in relation to the current circumstances. For example, let’s say that Bridget has, for a long time, been on a pension policy that is perfectly serviceable, but that isn’t netting her any particularly great rewards.

By browsing the market and exploring different pension policy options, Bridget could find that she can make considerable extra capital by switching policies or finding a scheme that gives extra benefits. This isn’t just a one-time way to save either, and as the market changes in during her final years of employment, Bridget can keep shopping around to get the best deals.

In doing so, it’s necessary for Bridget to be aware of what swapping pension policies will mean for her tax, too. Depending on the policy/policies she has, the amount of tax she will have to pay on any investments could change or she may be viable to take advantage of certain tax relief strategies.

SAVINGS AND INVESTMENTS

Having savings in general is a good idea, especially as life isn’t predictable. However, to maximise savings, Bridget can explore account options. Typically, the longer she’s willing to keep money in an account untouched, the better the interest will be. Seeking out higher interest accounts and funnelling an extra capital into these is a great way to earn more on money, usually with little risk involved. Though interest rates aren’t particularly high right now in most Cash ISA accounts, there are other options that will have greater returns – though usually with slightly more risk, such as Stocks and Shares ISA accounts and LISAs (Lifetime ISAs). Plus, even switching standard saving accounts between banks often brings immediate perks such as cash lump sums and other benefits that Bridget could take advantage of in the short- and long-term, such as travel insurance, money back on groceries and fuel and other everyday savings.

On the investment front, Bridget should make sure that her existing portfolio of investments is balanced and performing well. Bridget can make serious money is she’s willing to be a bit riskier on this front. Generally speaking, people should avoid investing any capital that would have a significant impact on their lives if they lost it. However, if Bridget does have income at her disposal that she can live without, investing wisely could see her net huge returns if done correctly and at the right time.

REDUCE ANY DEBT WHERE POSSIBLE

The last thing anyone needs as they head towards retirement is the threat of debt hanging over them. Of course, debt varies wildly from person to person depending on their borrowing habits. However, let’s assume that Bridget uses credit cards and still has a mortgage to pay off.

Through careful planning and looking deeply at her finances, Bridget may find she is able to stop using credit cards completely and also pay off the remainder of her mortgage before retirement, leaving her with more manageable outgoings when the time for retirement eventually comes around.

THE EARLIER YOU START THE EASIER IT IS

Retirement may seem years and years away, but the sooner you start planning, the easier it is to ensure your finances are in good condition for the future. Seeking expert advice is vital in this scenario. Working with a team such as The IFAs will enable you to plan your finances effectively, explore the available market options for pension policies, insurance and seek advice when it comes to investments, putting you in the strongest position for when your career is coming to an end.

For more information, please call 0845 345 5060 or 0754 336 8478 or visit www.theifas.com