Are You in Retirement?
Making Your Pension Last
The biggest fear for most retirees is running out of money. Many retirees today are drawing down from defined contribution pensions that can be depleted quickly if withdrawals aren’t carefully managed. Your withdrawal rate largely depends on investment returns, how long you need your money to last, your flexibility to reduce spending if necessary, and how much you plan to leave to beneficiaries. Consider your long-term health and retirement plans before instinctively taking a substantial amount as a withdrawal. Working with our empathetic financial planners, we can help you decide on the most effective withdrawal strategies of your pension(s), ensuring you have sufficient capital available to access at the most pivotal stages of your retirement.
We can help you
- Achieve the retirement you want to have.
- Simplify your various pensions and invest them to achieve your retirement goals.
- Give a helping hand to your children – perhaps with education fees or getting onto the property ladder.
- With tax planning to make sure you can pass on your wealth in both life and in death.
- To release equity from investments, including your home.
- With long-term care planning to make sure that money is available to pay for your care.
What our clients say
Long-Term Investment Strategies
Many retirees make the mistake of becoming overly cautious with their investments, instead preferring to move everything to cash or low-risk bonds, not realising that this could expose erosion risks caused by inflation. Your money needs to maintain its purchasing power as much as possible, which is why maintaining some exposure to growth assets (such as equity investments) helps your portfolio keep pace with inflation. The right balance depends on your age, health, risk tolerance, and income requirements, but most retirees benefit from maintaining some stable investments rather than abandoning them entirely. Gradual investment reductions make sense as you progress through retirement, protecting remaining capital. At PFM Associates, our investment and financial planning experts can analyse your position and identify low-risk investment opportunities that make sense, allowing you more freedom and peace of mind, while preserving valuable capital.
Later-Life Care Planning
Care costs can substantially and quickly drain accrued lifetime funds. Residential care and nursing home fees in the UK are high, particularly for those requiring round-the-clock care in premium locations. Your local authority will be able to assess finances if you require care, including assets and how care can be funded until they fall below a certain threshold. Planning ahead gives you more options, with immediate needs annuities providing guaranteed income to cover care fees, and even equity release from your home providing long-term reassurance without the need to sell. Trust arrangements may also preserve some assets but these need to be established well ahead of time. While many hope they’ll never need residential care, and indeed many don’t, having a plan for the possibility, even if never used, provides valuable peace of mind for you and your family.
Gifting Strategies
For those with sufficient retirement income and capital, helping children and grandchildren financially can be incredibly rewarding. From an inheritance tax perspective, gifts of any amount to individuals are potentially exempt from your estate if you survive seven years after making the gift. Gifts made within three years of death that exceed the nil-rate band are fully taxable, with tapering relief reducing the liability for gifts made between three and seven years before death. You can also make gifts from surplus income that fall outside your estate for inheritance tax, and if you have sufficient income to maintain your lifestyle and gift the excess, these can also be exempt without being subject to the seven-year waiting period. Though these need to be documented and considered clearly, ensuring they don’t compromise your own financial security. Working with our dedicated financial advisers, you’ll be provided with tailored financial advice and guidance designed to give you complete freedom and flexibility in your later years while fulfilling your gifting desires.
Personalised Estate Planning
Your circumstances change throughout retirement. You might lose your spouse, family relationships might shift, or new grandchildren might arrive. Regularly reviewing named beneficiaries on your pension(s), life insurance, bank accounts and properties ensures your assets pass according to your current wishes. Wills also will need periodic reviews, accounting for any changes in tax law, family circumstances, or assets, whereby your current will may no longer achieve what you want. Later life is also when many people consider setting up lasting powers of attorney, ensuring trusted individuals can manage your affairs if you lose capacity.
Ongoing Retirement Guidance and Advice
We work with retirees throughout their retirement journey, providing ongoing reviews and adjustments as circumstances change. Our Chartered financial planners help you navigate sustainable withdrawal rates, investment strategy adjustments, tax efficiency, and the evolving challenges that arise across different retirement stages.
From portfolio reviews to care planning, gifting strategies to tax-efficient income coordination, we provide the ongoing support that ensures your retirement remains financially secure regardless of what life brings.
Our relevant services for those in retirement:
- Retirement – sustainable income strategies and ongoing retirement planning
- Investment – portfolio management for longevity and inflation protection
- Long-Term Care – care fee planning and asset protection strategies
- Wealth Management – ongoing oversight and coordination of your retirement finances
The Financial Conduct Authority does not regulate estate planning or tax advice.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
This content is for information only and does not constitute advice.
FAQs When in Retirement
This can happen during market downturns and is one reason why maintaining some exposure to growth investments matters. If your pot is declining solely due to withdrawals and not market performance, you may need to reduce your income temporarily.
Many people in drawdown consider purchasing an annuity in their mid-70s or early 80s to provide guaranteed income for essential costs. This removes investment risk and longevity risk for at least part of your income, whilst you might keep some capital in drawdown for discretionary spending.
Start by understanding the local authority means test (£23,250 threshold), consider whether you want to protect your home for inheritance, and explore options like immediate needs annuities or equity release well before care is actually needed.
Many advisers suggest maintaining at least some equity exposure even in your 80s to counter inflation. However, the proportion should be reduced compared to earlier retirement, and your specific circumstances, health, and risk tolerance all matter.
Why work with us?
There are many reasons why over 2,000 people in Dorset, Hampshire and the South have chosen us to help them on their financial journey.
Ready to start your journey?
If you have any questions or would like to organise a no-obligation consultation at our expense, please complete this form.