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The earlier you start actively planning for your retirement, the better chance you have in achieving the financial peace of mind and lifestyle you hope for during your retirement years.

When people start working, they might think ‘It’s ages till I retire, I’ll think about that in the future’ but the best approach is to not only establish what your retirement goals are early, but also review them at regular intervals throughout your working life.

Your goals and approach to achieving them may change depending on how far you are from retirement. For example, a younger person may be willing to use an aggressive approach to their pension pot, by investing in higher risk investments that may have short term fluctuations as the market rises and falls. However, the longer investment period involved allows for recovery from any downturns and also scope for investment of pension contributions when asset prices are cheaper. 

Those in the middle of their working life, are advised to follow a balanced and risk-managed approach. Involving a mix of stable and more volatile investments, in line with your risk tolerance and personal financial goals. Diversifying your portfolio helps mitigate risk while still providing the potential for growth. 

Whereas those individuals who are due to retire in the next few years, would be better placed for a more careful investment profile that minimises risk for the first five to ten years of retirement. Meaning that your pension pot is better placed to deal with global factors such as financial crashes or other market volatility.  Such a stable portfolio allows you the peace of mind that your financial wellbeing is protected during your early retirement years.

It is vital that your portfolio is regularly reviewed and rebalanced to ensure that your retirement strategy is on track. As market fluctuations and asset performance can change over time, not regularly reviewing your portfolio can lead to increased risk exposure and less chance of meeting your financial goals.

If you need advice in this area or any other financial matter, please get in touch.

4 June 2024

The views expressed in this blog do not in any way constitute advice and are specific to the date noted. As time passes the facts can change and readers should consult their adviser for up to date advice on any matters covered within the blog. Invest Southwest offers an initial review, which is free of charge, however long it takes. From this we will be able to confirm how we can help and give you an opportunity to decide if you would like us to. Thereafter, we will provide you with detailed recommendations and exact costs. Please note that we promise not to levy any kind of fee unless we can demonstrate a benefit to you.