You're in the prime of your life. Retirement is a long way away. Nevertheless, your subconscious tells you that « every now and then, you should stop and think about your retirement and all that entails». While retirement used to be seen as a time of passivity, many people now use it as a time to fulfil long-held dreams and pursue new hobbies – ideally without lowering their standard of living.
Don't be fooled, though: retirement is also a time with financial pitfalls. Extreme old age, the need for care or the legally prescribed division of an inheritance may result in your savings shrinking rapidly or in a higher proportion of your assets being tied up than you would wish. To ensure you can enjoy your retirement without worrying about these things, early planning is crucial.
In practice, planning for retirement is divided into three phases:
From the age of 50, it makes sense to start thinking about some fundamental aspects and personal goals in terms of your retirement; in other words, to develop a «master plan». This includes addressing questions like:
- What will it cost to retire early?
- Should I withdraw my pension fund assets as a lump sum or draw a pension?
- Do I have enough assets to support me into advanced old age?
- Should I reduce my mortgage?
At this age, it is high time to make provisions for old age: it's the last chance to bolster your financial cushion for retirement, and tax advantages in relation to pension fund buy-ins and 3a contributions will never be greater.
Once you're heading for 60, but at least three to five years before reaching statutory retirement age, you should start planning your retirement in detail. Now is the time to put the measures you've been contemplating into practice, but only after careful consideration of all risks and opportunities. Many want to compare different scenarios to find the best possible solution. However, given the vast array of topics that need to be taken into account (incl. AHV, pension fund, taxes, security, investment mix, returns), this is no mean feat. The variety of options on offer, such as partial retirement, early retirement or continued (reduced) gainful employment beyond statutory retirement age, each come with special requirements. This second phase is one of far-reaching consequences, as most decisions you make now are irreversible.
In the third phase, usually after the age of 70, the main focus is on regularly checking your investment positions and optimising them if necessary. This often involves making final, important investment decisions and shifting riskier investments to lower risk vehicles with a fixed interest rate.
However good you are at finding things out for yourself, it's always worth consulting an expert given the complex and varied issues involved. The specialists in our Centre for Pension Planning have years of practical experience and expertise in this are. We work very closely with our customers to find the perfect solution. That's how we, together, can devise a tailored, sustainable concept for the next chapter of your life.