How’s Your Pension Looking?

I write a lot about retirement issues, as regular readers might have spotted!  The other day, I met someone for the first time and that got me thinking about writing something that might resonate with you.  She was a single lady in her fifties (not pictured below!).

She came to us asking for some clarification on her pensions.  She had built up various pension pots through previous jobs and, frankly, didn’t really know where she stood with them all.  She was an intelligent person and held a responsible managerial position in a large company but, by her own admittance, her mind switched off when it came to the subject of pensions.  Sound familiar?!

I try to stay away from the technical stuff when I meet people for the first time.  It seems to confuse the issue even more.  What I (and, most importantly, they) prefer is to have a wider conversation about retirement.  We talked about when she was thinking of retiring and what sort of things she wanted to do when she retired.  A question I like to ask is ‘what does a great retirement look like to you?’.

As the conversation developed, I learned that, whilst she was happy in her work, it wasn’t her reason for being.  She had lots of interests outside work which included walking holidays, visiting her son who lived 200 miles away and singing in a choir.  She had quite a lot going on but felt she wasn’t able to fulfil these interests as much as she would like because she was working long hours.

I find myself in a similar position if I’m honest.  I train in Taekwon-Do and I’m trying to learn Italian.  At the same time, I also have 2 young boys who seem to be doing the homework for all the 12 and 14-year olds on the planet!  It’s tricky sometimes to find time for all this, let alone do some extra things like going away for weekends with my wife and spending quality (non-homework) time with the family.  I also have a desire to get involved in some charity work (probably helping the homeless) but that’s just not on the cards at the moment.

The point I’m making is that we all have busy lives and a major part of the busyness is work.  Of course, it’s important to work.  We have to pay the bills and eat occasionally but, for most people I come in to contact with, there’s other stuff they’d rather be doing, and it wasn’t any different for the lady I’m talking about.  As we delved deeper, she came to realise how important the other stuff in her life was to her.

So, what did we do to help?  Well, we looked at all her existing pensions and the other savings pots she’d accumulated and we built some projections for her, so she could see what her financial future might look like.  We needed her help to give us a clear idea of her expenditure at the moment and what that expenditure might need to look like after she finished work.

The upshot of this was that she could think about retiring in around 5 years.  Still plenty young enough to do the things she wanted to do.  She had it in her mind that she’d probably have to wait until she was 65 (or older) but, it really didn’t look to be the case.  She felt empowered and very enthusiastic.  We needed to make a few changes to her pension products to make them more efficient but that was only in the context of making her dreams come true as soon as possible.

How things pan out for her, we don’t know but she certainly feels a lot clearer about her retirement and seems more reassured that she has a plan to move forward with things.  This is the best part about what we do for clients, empowering them so they can do the important things in their lives… the things that really matter to them.Until next time!...