Let’s face it, it’s a busy world, and there isn’t always time to worry about retirement. Luckily, if you have a reputable financial advisor, you know your portfolio is taken care of. But there are times when they need to see you to discuss the progress of your pension/retirement.
Why have regular reviews?
Life is unpredictable, and personal and financial circumstances change over the long term. This can have a significant impact on retirement portfolio planning. For example, getting married or divorced, increasing wealth and investments, or even receiving an inheritance can change your income at retirement. Have you joined a large company pension or have an investment in stocks, bonds, or several funds?
Over time, your needs change, and you may need more money for retirement. Also, the fund composition of your retirement investment can change over the years. Year after year, certain parts of your funds perform better than others, e.g. equities, cash, or bonds allocation will earn different interest. If one outperforms another, it may change the risk profile of your investments. You need the help of a financial advisor to review your retirement account.
What a Review Covers:
- Rebalancing your investment funds back to your risk appetite level
- Changing funds for better-performing ones that charge lower fees
- Selecting more diversified funds
- Adjusting regular retirement savings contributions according to your new lifestyle expectations
- Possibly provide additional retirement savings solutions that will be more tax efficient
- Any online investing that will affect your retirement portfolio
When to review your retirement portfolio
An annual review by your investment advisor is the best time to give the necessary advice to fine-tune or rebalance your retirement portfolio. There are, however, other times when a review is also essential.
- When you get married or have a life partner – Your retirement needs will change as you will have to fund retirement income for two instead of for one. Or you might have two retirement portfolios to work with now; your advisor will review both portfolios to determine a new risk profile, make any transfers, or make contribution adjustments.
- When you get an increase, bonus, or inheritance – The extra income could supplement or boost your retirement pot.
- When your assets change – for example, when buying or selling a property. You might use the property as rental income.
- A few years before retirement – as you near retirement, usually, you would reduce the risk on a portfolio to preserve capital. This means asset allocation into less risky investments.
- When you need to retire early – If you are forced to retire earlier because of ill health, a review is mandatory to determine your income at the new retirement age.
- When you get divorced – Getting divorced changes your financial situation at retirement. You might need less because you are only one person to finance, or your pensions might be divided to support the ex-spouse.
- When your lifestyle changes – When you upgrade your lifestyle, you need to ask yourself if you want to maintain that lifestyle when you retire. An upgraded lifestyle means saving more to finance your retirement income.
Anytime your financial situation changes, your retirement/pension portfolio needs to be reviewed to see if you are still on track for the lifestyle you imagined at retirement.
Chat with your financial advisor to review your retirement investment portfolio.
Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.