In a changing world, one of the areas where change is most evident is how we think of retirement. The traditional view of retirement is now an outdated concept with what retirement means being a very individual choice.
Instead of retiring in our 60s, nowadays many aged 70 and above are fit, living life to the full, and some still enjoy working.
We recognise that everyone has a different idea of how life in later years should be – you may not even be planning to ‘retire’ as such. The important thing is to give yourself the flexibility to choose and change. AAM Advisory can help you create that flexibility.
How many times have you heard that you need to plan for your retirement, especially in the current economic climate, and even if you are a member of a company pension scheme or will receive a retirement pension from your country, it’s essential to supplement this with personal arrangements of your own.
It may be cliché to say that the sooner you start putting money away for your retirement the better, but it still makes sense – and, with expert help, you too will be able to find the right way to save for your future goals.
Every year makes a difference
Every year you save for your retirement can dramatically increase the amount you will have to live on when you stop work. Naturally, you will have your own ideas about how you want to spend your retirement, and the money you need to support your lifestyle will depend on your aspirations. Looking at the examples on the next page, you will see the potential cost of any delay in starting to save for your retirement fund.
Say you want to retire at 60, this is how much you’d need to save each month to reach a target of $300,000 assuming a growth rate of 7%pa.
The cost of delay
Using a monthly contribution of $500, the chart above demonstrates the impact starting to save early has on your life in retirement. It also shows how upon reaching age 60, leaving the investment whilst drawing an income means the money has the potential to continue growing and ultimately leads to greater income over the next, in this example, 30 years.
If you save $500 per month from the age of 30 to age 60 you will invest a total of $180,000 which could be worth $588,032*. Drawing equal monthly amounts of $3,828 would exhaust the investment over the next 30 years but mean a total income of $1,378,080 – or each $500 invested returned $3,828 of income. Delaying investment by just one year would reduce the total income to $1,274,040, or $3,539 per month.
*Remember, your retirement investment may grow at less than 7% and the value of your investment may go down as well as up. This example does not include product charges or take into account any external fund management charges. The figures are for illustration purposes only and are not guaranteed.
Deciding what is most important to you
There are many practical aspects to think about before choosing how to plan for your future.
Will you have any family or elderly relatives dependent on you? Will you stop working entirely or continue part time? Will you stay in the country where you’re living now, or move somewhere else? You can probably think of many more questions to answer before deciding how much income you will need and when your ‘retirement’ will begin.
Your next step is to consider how you can make your money and investments work hard to maximise your own and your family’s future income.
Five challenges facing investors
- You want to make sure you enjoy the benefits of a well-paid career when you retire, but are unsure how, given all the financial turmoil.
- You have investments in a variety of assets and in different countries. How do you keep control of them against different tax regimes and widely varied national laws?
- Global interest rates are mostly low. Saving into cash deposits is unlikely to protect your wealth against inflation. What other choices are there?
- You accept that there’s a degree of risk in any investment, but you need your finances to be managed by a safe pair of hands.
- You want to consolidate your investments into an easy to manage solution.
Think beyond the obvious
Retirement planning is so much more than just paying into a pension while you’re working and drawing it back later. There are many other ways to manage your money to ensure you have flexible choices in the future.
That is why it’s so important to work with an AAM Advisory Wealth Manager, who will help you create a diverse portfolio of retirement planning solutions. These will not only help you build your retirement fund but also give you the flexibility you will need when it comes to funding your retirement.
Live your dream with expert help from AAM Advisory
So, you are ready to start planning for your retirement – and we are here to help. Your Wealth Manager will take the time to understand your vision for your future and how you would like to achieve it. Your Wealth Manager will then tailor an individual retirement solution for you offering flexible options to give you the freedom to live life as you choose and achieve the balance you want.
Look forward to the future with confidence
Together, you and your Wealth Manager can design your retirement plan to ensure that:
- your financial arrangements are tailored to support your personal vision of the future
- you can choose to carry on working and saving for as long as you wish, so you can enjoy your retirement, your way
- your arrangements are flexible enough to adapt to the life you don’t yet know
- as your global journey continues, your investments and retirement solutions can go with you without the need for expensive changes
With our collective wisdom and experience to call on, you can plan for a happy fulfilling retirement, as adventurous or serene as you want, knowing your finances are in good hands and your family’s future is secure.
Book a Pension Audit
As part of building a plan to achieve your retirement goals, AAM have developed a comprehensive UK Pension Audit report which will assess your needs and current position using sophisticated analysis tools and cash flow modelling.
You will always receive a full recommendation on your Optimum Pension, showing the right course of action for you to achieve the best retirement outcome, whether that is the pension(s) you already have or an alternative.
Every AAM UK Pension Audit is checked by a specialist team led by a Chartered Financial Planner with over 25 years of experience in the provision of retirement planning advice.
An AAM UK Pension Audit will put you in an informed position, able to make informed choices about your Optimum Pension and how best to secure your perfect retirement.
- be clear about your objectives and ask yourself what you want when you retire. For example, you’ll need a certain amount to continue your current standard of living; you may want to take annual overseas holidays; or perhaps you’d like to maintain an annual membership to an exclusive health club.
- increased life expectancy and more active lifestyles mean that your income will have to stretch over a longer period – you could quite possibly need an income for 30 or even 40 years after you retire.
- prices won’t stop rising, so an investment plan is crucial to prepare for decades of rising costs.
- understand how much risk you’re prepared to take so that your Wealth Manager can advise on the most suitable investment product available to you.
- don’t put off the inevitable.
Take the next step to a prosperous retirement now
Talk to your Wealth Manager about planning for your retirement. The sooner you start planning, the more likely you are to be able to enjoy life in retirement on your terms.
This article is intended for general circulation and information purposes only. It may not be published, circulated, reproduced or distributed in whole or part to any other person without prior consent of AAM. This article should not be construed as an offer, solicitation of an offer, a recommendation or provision of financial advice. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed financial adviser before making any decisions. Whilst we have taken all reasonable care to ensure that the information contained in this article is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. Any opinion or estimate contained in this article is subject to change without notice. AAM Advisory Pte Ltd is licensed by the Monetary Authority of Singapore, FA Licence no. 100032.
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