REPLACE - Your Freedom - h1

Do you have a plan?. One of the first questions Tony Blair asks

Record & review

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where do you want to get to?

At what age d you want to be financially indepedent?

What lifestyle do you want to enjoy? How much do you expect to spend?

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what lifestyle do you want to enjoy?

at what age do you want to be financially independent, so you can choose you you spend your time?

Close your eyest for 20 seconds and visualise your future. What are you doing at different stages of your life? How are you be when you retire? How are you spending your time? What is your lifestyle.

Jenny Kovacs comments: Financial planning = Freedom / Choices. Where would you like to be? When? What is your vision. A dream without a plan is just a wish. Write them down. What could stop you?

Pathway

If you don't have a specifci plan for your money, what is the earliest that you are likely to need it?

If you haven't retired yest, when do you want to retire? Will you retire fully or gradually? What lifestyle do you wnat to enjoy? Holidays, special events, when will you replace your car? .list-body-text xxx

Write down your goals. Writing them down has been shown to significantly increase your chnaces of achieveing them

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The only goal that matters is yours - Carl Richards email 15/12/2022. When it comes to financial goals, the only ones that matter are yours. Listen, I realize any discussion of goals can be tricky. But at least for this discussion, I find it helpful to think of a goal simply as an object of desire. It’s something I want. But here’s the rub: We are really bad at knowing what we actually want. In fact, we learn what we want by watching what other people want. From the youngest age, we learn to desire by seeing what our parents, siblings, and peers desire, followed eventually by what people on social media desire. In a very real sense, we co-opt other people’s goals because it’s actually very hard to get clear about our own. This can wreak havoc in so many areas of our lives, particularly when it comes to our relationship with money. There’s an old saying that we spend money we don’t have to buy things we don’t want to impress people we don’t even like. This happens when we shop for cars or houses or investments. You hear your wealthy uncle talking about how important it is to own municipal bonds. He must be really smart because he has a bunch of money, right? Suddenly, you think you should go buy municipal bonds, too. You hear about all the cool kids investing in start-ups and all the fancy people buying Teslas. Maybe you should do that, too. But here’s the thing: None of that matters. None of it. The only goals that matter when it comes to your money are your goals. Not anyone else’s. So… what are your goals?

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1. Freedom age

2. Spending at freedom age - regular & all one-off (pre & post)

3. Gather information - own & owe &  ongoing savings / spend - Pensions / Savings & Investments / Assets & liabilities (own & owe) / Expected gifts & inheroitances

4. Input in tool & see your outlook

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Estimate how much do you want to be able to spend, in today's money

a. Essential

b. Lifestyle

c. Discretionary

Pensions

Savings & investments

Other assets

Mortgages, loans & liabilities

Expected inheritances and gifts to be made or received

State pension forecast

DB pensions - forecast

DC pensions - value of pots

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If you are currently a member of a pension or contributing to a pension:

If it is a workplace pension, your earnings

Your employer's contribution as a percentage of your earnings

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Are you on track, or is there a gap?

a. Put a plan in place to put you on track to reach your chosen freedom age

b. Reset your goals - either a later freedom age or spend less at your fredom age ... then see the outlook for your new goals - then re-run the tool

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The money you save and invest now will work hardest because it will be invested longest

12 common mistakes people make with money - Jason Butler - The Evidence based investor - search online

Back of a napkin simple - Earn / Spend / Own / Owe - rule of 25 (4%) - but has limitations - Dimensional PFS Power webinar 16/02/2022

Online - Mr Moneyjar

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is about stopping some small & repeat purchases that dn't enhance your life - or subscriptions that you don't use

is not generally about going without experiences that enhance your life and will provide memeories, such as holidays

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Unexpected expense - household / car

Redundancy

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Unable to work due to accident or illness

Death of spouse or partner

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Don't save / invest enough - early enough

Inflation higher than expected

Investment returns lower than expected

Outlive pension pot - pot runs out

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Inflation - include inflation in projections. Look at range of scenarios

Have a plan - start early

Realistic assumptions about investment returns. Regular reviews

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1. Workplace pension

2. Repay expensive debt

3. Emergency fund

4. SAYE - does your employer offer one?

5. General saving & investing options

5. State pension - check record / voluntary NICs

Existing pensions / investments . review charges / options / consolidate? >>>

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Don't opt out / don't leave

Match employer's contributions if this option is available

Salary sacrifice?

Don't assume default fund is suitable for you

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Pension vs ISAs >>>

Lifetime ISAs >>>

Pensions >>>

Investing >>>

Cost of delay >>>

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How much?

When? / Over what period?

Increases

Cashflow assumptions - see Truth Software internal docs

Record - makes it easier when you come to review, and if you are unable to do it, for someone else to see the key information. Should review periodically and have an annual tax check.

Spending / inflation assumptions

How income will be funded

Investment principles / process

Annual tax check - allowances / exemptions

Growth rate assumptions

People involved

Will / LPA

Review frequency / dates

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Royal London presentation at Nottingham Insured 2021

Royal London has guides on intestacy / what to do when somebody dies

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Detailed planning not needed now. Broad target and plan and be moving in the right direction

Spend money, but don't waste money - may regret it later

Decide how much need to save, not seeing what is left and investing out

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Work Backwards
The Revolutionary Method to Work Smarter and Live Better
Tim Duggan
May not be appropiate to include link but concept of setting goals and working backwards may be relevant

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This page is for planning when you are close to or during your retirement. If it will be some time until you retire and you are planning the funding of your retirement pot the 'Freedom' page has the most suitable planning tools.

How much is it safe for me to send? Having a financial plan can help you. Drawdown tool - find your SWR

2 possible approaches:
1. Your desired lifestyle & goals - can you afford them?
2. What is the maximum income it is 'safe' for you to take?

Centre for research in social policy - Loughborough University >>>

Book: Changing gear: Creating the life you want after a full on career

Book: The 100 year life

Jason Butler FT article - Do you have a plan for your retirement?

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Analyss:
1. Annual spending - yield required
2. Projected value of pot

Annual yield needed:
Calculate - net yield requred from assets
is this sustainable? Investment return needed?

Savings & investments - include equity in house if plan to downsize
Potential changes - inheritances

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1. Managing risks
2. State pension
3. DB pensions
4. Which pots to take income from?
5. DC pensions
6. Record & periodic review

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1. Longevity risk
2. Personal risks
3. Spending risks
4. Savings & investment risks

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Living a long life and outliving your pension pot

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1. Death of a spouse or partner, resulting in loss of income
2. Ill health, resulting in care costs

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Increasing living expenses due to inflation
Unexpected costs, including due to care costs

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Annual spending to be funded by:
a, Secure income
b. Drawdown

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If you have not started to recieve your State pension, check your State pension forecast

If you will not receive the maximum State pension, check your National Insurance record. If it is not full consider making voluntary National Insurance to boost your State pension

If you do not need to recieve your State pension this year / it would be taxed at a high rate of income tax due to other income, there is an option to delay receiving the Satte pension. State pension needs to be claimed.

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If not already started to recieve DB pension, obtain projection
Check:
Dependant's pension
SAnnual increases
Option to transfer to a DC pension. For most people may not be the best option, but can be appropriate for some

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1. Estate planning
2. Income tax and CGT
3. Pensions tax free lump sum
If you have money in different pots, e.g. DC pensions, ISAs, GIAs, and you want to take an income or make ad hoc withdrawals from them, you will need to decide which pots to take income from. Points to take into account include:

Estate planning:
Pensions are now a good way to pass money down through the generations

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Move to pensions / tax page?
Use personal allowance - avoid HRT
CGT - AE - spouse - move to CGT page?
Pensions - PCLS / phased
ISAs - tax-free
Assets outside wrappers?

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Move to pensions page?
1. How to take the benefits
2. Tax-free lump sums
3. Annuity and / or drawdown
4. Annuity strategy
5. Drawdown strategy
Consolidate?

Money helper: How long might your money need to last in retirement?

Money Helper: Investing in retirement

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Last planning tool that included Retirement Plan tool was 2022.06.27

Before using tool user needed to:
1. Estimate spending - either guess or complete spending analysis
2. Decide how much income will need > calculates gross income required using > Tax & net income tool
3. User needs to know how much gross DD to take - dashboard to show initial income from different sources - core / DD

Inputs:
Target annual income before tax
Core income
Value of pot
Ad-hoc additions / withdrawals to / from pot
Charges
Asset mix
Growth rates
Market corrections or underperformance

Outputs:
Annual income during next 3 years - split between core and withdrawals from pot
Age will receive target income to and pot will last to at different assumed growth rates

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Money Helper: Retirement planning > Preparing for retirement checklist

Money helper: Downsizing your home in retirement

Money Helper: Moving, living and retiring abroad

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