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PENSIONS | INVESTMENTS | FINANCIAL & RETIREMENT PLANNING
Get Financial Planning advice
Contact us for assistance with:
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Financial forecasting
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When you can retire and what will you get
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How maximise all of your savings into the future
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What if "worst case" scenarios
Page Author: Evan Hughes CFP
It's not just what you have. It's how you use it.
Over your lifetime, your finances can become surprisingly complicated.
You might have several pensions from different employers, savings, investments, property, a mortgage, future State Pension income and perhaps an inheritance.
The individual pieces may all be perfectly good. Making a plan for how all of your "Lego blocks" work togther is crucial.
At Ethico, financial planning is about looking at the whole picture and building a practical plan around your life. This will help you make the most of what you have, reduce unnecessary tax and make better financial decisions over time.
Building towards retirement
The years before retirement can be some of the most important financially. You may be at your highest level of earnings, have more disposable income and have valuable opportunities to increase your pension and savings before you stop working.
Good planning can help you understand:
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How much you are likely to have at retirement
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Whether you're currently saving enough
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Whether additional pension contributions make sense
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How much tax relief may be available
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Whether you should prioritise your pension, mortgage, savings or investments
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What your expected retirement income will actually look like
Sometimes relatively small changes in the final years before retirement can have a significant effect on the amount available to you later.
For most people (but not everyone), the best strategy is:
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First, maximise your pension. Tax relief on contributions, tax-free growth on funds, and tax advantageous drawdown makes this option the most beneficial overall.
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Next, overpay or clear your mortgage. Reducing debt and saving on interest payments is important but also the psychological boost from becoming debt-free is a major factor in feeling financially secure.
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Lastly, save and invest outside of pensions. Growing your cash savings provides additional back up and confidence when deciding on when to stop working.
You may decide to do a combination of these options based on your situation and goals.
Making the most of your pension before you retire
For many people, the period before retirement presents an opportunity to boost their pension tax-efficiently.
Depending on your circumstances, this could involve increasing regular contributions, making AVCs or using available tax relief to make additional lump-sum contributions.
The goal is to determine how much you need, what you can afford to contribute and the most tax-efficient way of getting there.
Which pension should you access first?
Having several pension pots gives you options. You may have pensions from previous employers, a current occupational pension, personal pensions, PRSAs, an ARF, savings and investments.
You don't necessarily need to access everything at the same time. In some circumstances, it can make sense to access different assets at different stages of retirement, allowing other pensions or investments to remain invested for longer and potential reduce tax liability in doing so.
We can help you plan the chronological order in which you use your pensions, savings and investments — taking account of tax, investment growth, your income requirements and the rules applying to each asset.
The order in which you use your money can matter almost as much as how much you've accumulated.
How much will you actually have to live on?
A pension projection might tell you that you'll have an income of €50,000 a year in retirement.
But you don't live on €50,000. You live on what arrives in your bank account after tax. That's why we plan retirement income on an after-tax basis.
We look at your different sources of income (pension pots, State Pension, investments, rental income and other assets) and estimate what you'll actually have available to spend. Then we compare that with the lifestyle you want and see if it all adds up and makes sense. You might be pleasantly surprised.
That gives you a much more useful answer to the question: Can I actually afford to retire?
Making your money last
Retirement could last 20, 30 or even 40+ years. Your plan therefore needs to consider more than your income in year one.
We can model how your finances may change over time, including:
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Inflation
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Investment growth
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Regular withdrawals
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Larger future expenses
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State Pension income
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Tax
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Changes in spending as you get older
The objective is to find a sustainable level of income that lets you enjoy your retirement without constantly worrying about running out of money.
Planning for the unplanned
Financial plans rarely unfold exactly as expected. You could be made redundant earlier than planned. You or your partner could become ill.
You may need to stop working sooner than expected or suddenly have additional family or care costs.
A good financial plan shouldn't only work when everything goes right.
We can stress-test your finances against different scenarios and help you build appropriate cash reserves, protection, and flexibility into your plan.
The objective isn't to predict the unexpected. It's to make sure you can cope with it if things don't turn out exactly as planned.
Inheritance and estate planning
Eventually, financial planning becomes about more than your own retirement. You may want to help your children during your lifetime, leave assets to family members, provide for a spouse or partner, or simply make sure your estate passes to the people you intend.
Planning ahead can help you understand:
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What your beneficiaries may inherit
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Potential inheritance tax liabilities
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Lifetime gifting opportunities
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How pensions and other assets are treated on death
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Whether assets can be passed on more tax-efficiently
The aim is to make sure more of your wealth reaches the people you want it to reach in the most efficient way possible.
Bringing everything together
Financial planning isn't about finding one perfect pension, investment or product. It's about coordinating everything.
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What do you have to work with today?
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What do you want your money to allow you to do?
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When can you afford to retire?
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How much can you safely spend?
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Which assets should you use first?
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How can you minimise unnecessary tax?
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What happens if life doesn't go according to plan?
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And what happens to your money when you're gone?
At Ethico, we bring those decisions together into one clear financial plan.
Build a plan for your money and your life.
You may already have pensions, savings and investments.
Financial planning helps turn those individual assets into a strategy.
We'll look at where you are today, where you want to get to and the most efficient way of getting there — while making sure your plan can adapt as your life changes.