Are you retiring this year? Give it some thought

If you are due to retire this year, you may want to reconsider your plans.

Hundreds of thousands of workers will retire at the ‘worst time in two decades’ this year, according to a recent article in The Telegraph.

With oil prices soaring, stocks falling and ever-increasing inflation, it is certainly an unstable time for the markets upon which so many pension pots rely.

The fear is that people have seen their savings shrink by 12 per cent, according to the article, and many pensioners will need to draw extra incomes from their pensions to maintain their standard of living.

So what can you do? The current state of affairs will not last forever and as with all things, will have their season. Which means that things will eventually improve, markets will stabilise and the value of pension funds will recover.

As previously predicted/warned in this column, we are seeing the puncturing of the uber trendy ‘tech bubble’, as the Nasdaq falls thanks to a reliance on big tech such as Tesla and Apple, which have seen significant losses in recent times.

We saw this wind blowing and although no investment is without risk, we have looked after our clients’ money in far more stable and secure stocks and funds that are more likely to ensure a consistent and reasonable return than some of the market’s ‘trendy darlings’.

These ‘boring’ investments have served our clients very well and as a result, we – and they – are doing far better than those whose pension pots are shackled to fast-burning shooting ‘stars’.

Of course the current situation has still affected us to a degree, but we have managed to keep the ship on course and she certainly isn’t in any danger of sinking!

Those reaching retirement this year may wish to consider working longer, if they are able to, whether full or part-time. Of course that’s not desirable and sometimes not possible, but if it is, it makes sense to postpone for a little until things recover somewhat.

Failing that, limit the withdrawal from the pension and raid any idle surplus cash, even if temporarily until it can be replenished, from the pension if necessary, at a later point.

It is also worth bearing in mind that your ‘safe’ investments are potentially doing you no good at all in the bank or the ‘sock under the bed’.

It has been estimated that three million pensioners hold all their ISA money in Cash ISAs, earning them little or nothing and losing against inflation every year.

Simply put, that money isn’t worth as much to you in real terms, so if any of this applies to you, or you have any concerns, please do get in touch with us for a no-obligation chat to see how we might be able to help.