5 Risks to Your Retirement Plans

Make sure that you consider all elements of financial-planning, especially new expenses, tax and healthcare costs before determining your retirement date

Morningstar News Team 15 July, 2016 | 12:03PM
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Think you are ready for retirement? It is not just a case of how big your pension pot is. Make sure that you consider all elements of financial-planning, especially new expenses and costs that you might not have had to contend with when you were working, when determining your retirement date.

A Market Downturn Early on in Retirement

Market volatility in early 2016 provided a reminder that retirement-portfolio balances can decline. And encountering a downturn, especially early in retirement, can affect the viability of retirement. If your £1 million portfolio were to drop by 25% next year, your £40,000 annual withdrawal would not be as obtainable - or sustainable.

Increased Health Costs

Retirees' healthcare expenses vary widely and may change over time; and not all costs are covered by the NHS.  In the event you require care in old age a care assessment is carried out by your local primary care trust which determines whether you qualify for help with care funding – called NHS nursing care contribution – or whether you can receive full funding, called NHS continuing care. To be eligible for continuing care you must be deemed to have a "primary health need".

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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