Citywire media opportunity

ended 14. September 2021

A Newspage friendly is writing a piece for Citywire on how advisers can decide what size retirement pot is suitable for clients. 

He wants to know what factors should go into deciding the right size of a retirement pot, e.g.

  • Does the size of pot depend on the type of client, risk approach, or are things such as care needs, inflation or the type of retirement product important?
  • What size of retirement pot is suitable and how should clients/advisers decide?

Deadline is tomorrow at 13:00!

3 responses from the Newspage community

Star Quote
"There are infinite variables in play when considering the size of a client's potential retirement pot, but the over-arching factors are normally the "soft facts" as we call them that are, by definition, impossible to generalise and different for each client. They include what's important to the client, what do they want to be doing in their retirement, how is their health and many other personal questions. Once we have a good understanding of these, then, and only then, can we work through and help define what sort of size retirement pot is appropriate."
How large a pension pot you need does vary greatly from client to client as our retirement goals, and our existing resources, will vary greatly. For example, for some clients, the state pension can be sufficient, whereas others might need a seven-figure pension pot. A good financial planner will take this all into account in order to calculate how much is enough for you. This can help you avoid working too long, or retiring too early and facing a bleak retirement.
Rather than focusing on achieving a certain sized pension on a fixed retirement date, we work this out a bit differently. This is because most people do not hit retirement age and then access all their pension in one go We work with our clients to understand how much they are likely to spend in retirement including living costs, holidays, gifts etc. After all, this is what we are all aiming for - being able to meet our spending goals (however big or small) in retirement. We assume that there will be a certain level of inflation so that the amount required will increase each year We will also include an assumed average growth rate for the pension each year If you are going to access most of your pension in the early years e.g. for a round the world cruise, then you may need a larger pot, because accessing money earlier means that it will have less time to grow for you to access it later on The key is to be flexible and make a plan that is bespoke to your aims and objectives