Retirement. To many, it seems like something in the distant future until the inevitability creeps up and you realise that you have 10 years to amass a wealth that would’ve been easier to begin amassing ten years prior.
There’s always a way forward, and our Risk Manager in London has created a checklist for you to begin the planning process with ease.
This article is a 5 min read.
From a personal finance perspective, nothing is more important than planning for the future and planning for retirement.
Assessing how much money you will need to retire depends on your plan. Your plan should show your expected income levels when you retire and contain an assessment of your likely expenses.
In creating your financial plan for a comfortable retirement, you will need to consider the following:
If that all sounds a little daunting, then don’t be afraid to engage the services of a Wealth Management Advisor (WMA). One of the first steps a WMA will take is to estimate what your income levels will be when you retire.
Your income may come from a number of sources. These sources are likely to include:
Your pension may be a private pension or a state pension. If you have a private pension your WMA will estimate what it will pay you when you plan to retire. This depends on the type of pension scheme you have (Defined Benefit Pension or a Defined Contribution Pension).
For a Defined Benefit Pension, the amount you receive when you retire is based upon how many years you’ve worked and the salary that you have earned.
Under a Defined Contribution Pension, your pension is built up using your contributions (and possible those of your employer if you have one), plus investment returns on whatever the pension plan has invested in, together with any associated tax reliefs.
At Firstline, we are experts at creating, growing, and maintaining wealth in Trinidad and Tobago.
With some of our staff working for over 4 decades in the financial industry, they have witnessed many a person’s finances rise and fall, and there are specific actions taken by those who keep their finances rising over their life, compared to those who tragically fall.
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Savings and investments are something that you build up over time. Your WMA can assess whether your savings and investments are working for you. In addition, it may be possible to transfer your existing savings and investments into your pension in advance of retirement and in so doing this may grant you some additional tax relief.
Consider whether your current residential home can be used to generate capital or additional income when you plan to retire. Can you downsize to a smaller home to generate capital or equity from your home? In the alternative, if you want to keep your existing home, can you rent part of that home to generate rental income?
If you have more than one property, then renting that additional property can provide a stream of income so long as your tenants pay on time. Property values tend to increase over time so owning an additional property can also provide you with capital appreciation. However, you will need to set aside sums to deal with running repairs and maintenance to the property.
We are Firstline Securities Limited, an independent financial services firm, based in Trinidad and Tobago.
We are experts in creating, growing, and retaining wealth for our clients in T&T, as well as in the French, Dutch, and OECS territories of the Caribbean.
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