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Financial Tips
Helping Dentists & Doctors Achieve
Their Most Important Goals
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6 Steps To Securing Your Ideal Retirement
We originally published this piece in 2014 and wanted to share it again as it's still as important as ever...
As we approach the end of yet another year, now may be a good time to look ahead towards your retirement, not just the next 12 months as many do at New Year (presuming you're not retiring in 2019).
You may have read or heard that you can never be too young to start planning for your retirement and, in our opinion, that would be correct!
To assist you, we have created an easy to follow 6 step process to help you achieve the income / capital you will need when you do finally retire (if you've not retired already that is).
The 6 steps are:
Step 1 - What do you really want?
Step 2 - Where are you now?
Step 3 - Forecasting your future
Step 4 - Where to invest?
Step 5 - Implement your plan
Step 6 - Staying on track
Let's have a look at each step in a little more detail:
Step 1 - What Do You Really Want?
You would not be alone if you focus on living each day as it comes, trying to find that ideal work/life balance but often failing to achieve this. After all, you no doubt have a waiting room full of patients to attend to so other matters can often take a back seat.
So, looking 10, 20 or 30 years plus into the future with a view to considering such things as where you want to be enjoying your retirement, what you want to do and the income you will need to achieve those goals when you retire may not be a priority.
Perhaps it should be!
A good first step is to put "pen to paper' and make a list of what you want your life to be like when you retire.
For instance, will you want to retire to a coastal home in the UK or live near your children, what sort of property will you live in and how much would it cost having made some assumptions about increases in house prices / inflation?
Will you want to stagger your retirement, perhaps only working 2/3 days a week for a period of time?
How often will you want to change your car, are there any new hobbies you want to take up and how many holidays a year will you take?
What level of income would you ideally like to receive each month as a percentage of what you presently get and how much would you like to have accumulated in savings/investments?
Once you know what your goals are you can start to plan towards achieving them. So, get that pen and paper out and start to draw up your list!
Step 2 - Where Are You Now?
Having established your retirement goals, you now need to examine where you currently are from a financial perspective. You can then work out what else you need to do to get to where you want to be when you retire.
What level of NHS pension will you expect?
Do you have any personal pensions in place?
What state pension will you receive?
What insurance policies do you have in place and will they continue when you retire? (such as private health cover)
What assets do you have apart from your private residence? For instance, do you have stocks and shares, savings, rental property and how much is your business worth?
What liabilities do you have such as a mortgage, loans and credit cards?
Step 3 - Forecasting Your Future
It's worth noting that most decisions you make when planning for your future are affected by other plans that you may have.
For instance, if you knew that you were going to inherit some money but intended to spend the funds on an expensive car that would have a negative impact on your available capital when you retire.
When you come to forecast the level of money that you will need throughout your retirement to fund your regular expenditure it's not always just about what pension income you require.
You may also need to take into account the savings and investments that you accumulate. This is because you may have to use some of your capital to supplement your retirement income to meet your expenditure to provide you with the lifestyle that you require.
You'll also need to make some assumptions such as when you are likely to live until (90/100?) and investment growth rates in your forecasting.
Step 4 - Where To Invest?
There are a number of factors that affect where you decide to invest your money. These include your attitude to risk, the period of time that you want to invest for, the amount you have available, any impending capital expenditure and whether you require growth, income or a combination.
The theory is that the more risk you are prepared to take then, potentially, the greater the opportunity to maximise your investment opportunities. The reverse could also happen.
Therefore, to reduce any risk, there is a lot to be said for having a diverse portfolio of investments made up of cash, bonds, commercial property and equities including maximising tax efficient schemes like ISAs and personal pensions, especially if you are a higher rate taxpayer.
And it's also advisable to take your capacity for loss into account, which refers to how much your investments can fall in value by until it has a meaningful impact on your current and future lifestyle.
Step 5 - Implement Your Plan
You'll have spent what is likely to be a considerable period of time in deciding what your goals are, analysing where you currently are financially, the financial position that you would like to be in when you retire and where you need to invest to achieve those things.
Therefore, it's important that you take the appropriate action and implement your plan - don't just pay lip service to it!
Step 6 - Staying On Track
On an annual basis, your plan should be reviewed by going back to Step 1 and working through each step.
For example, have any of your goals changed?
You should also review your investments and revise your forecasts. This should help ensure that you remain on track to achieve your objectives.
Take Action
Hopefully, you've found the 6 steps informative.
By following a process and this step by step approach, it really is possible to remove uncertainty and bring clarity to your long term financial planning, in turn giving you great peace of mind (or if it shows that you're not on track to achieve what you want, at least you'll be able to take action in advance).
It's what you do next that's important.
You can carry on as you have been which, if it has been to do none (or a few) of the steps, may not be the best course of action.
You can look to implement the plan yourself although, as you can see, there could be a considerable amount of work involved.
The other option is to outsource the task to a financial professional who will be able to work alongside you to create your own long term comprehensive financial plan.
As no doubt you're expecting us to say (!), yes, we do provide this exact service to dentists and doctors.
So, of course, we'd be happy to discuss your personal situation with you at no cost (and with no obligation).
We call this our 'Second Opinion' service, so if you'd like a confidential chat and start 2019 on the front foot, we'd love to hear from you.
Simply send an email with the subject line 'Second Opinion', along with a brief overview of what's on your mind.
Whatever you decide, just make sure you take meaningful action (if you need to)!
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Hot Topics Q&A: Stock Market Falls - Should I Be Worried?
Every week we receive questions from clients regarding all aspects of their  financial planning. So, rather than keep the answers to ourselves (and clients) we publish one key topic each issue.
Q. I have to admit that I've become a bit fixated on what's going on with the stock markets recently as they have fallen across the world, in turn affecting the value of my investments.
Should I be worried?
A. Its fine to be concerned, however if it's making you anxious then we'd say that's not good!
You also mentioned that you won't need access to your investments for at least 10+ years.
The Mainstream Media (MSM) have a few agendas when it comes to reporting on what the markets are doing.
One of which is to make investors worried, so much so that they continue to check back to see what the latest updates are and continue to consume the MSM's messages, which in turn keeps their advertisers happy (who would have thought, eh?).
Instead, we would encourage you to focus on the fundamentals, not MSM hype.
Take the long term view.
And remember that history tells us that being disciplined over the long term will usually repay the investor (although, of course, there are no guarantees).
Tuning Out The Noise (click here to load a 2 minute video) is one of the key strategies that we recommend.
Whilst there are many other factors to consider, this is one of the main ones we recommend you focus on.
Please send us your questions! It's easy to do. Just send an email to us here (and if we publish it we'll make it anonymous).
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Wrap-Up - New Beginnings & A Sense of Gratitude
  Graeme and I are sharing the final word for this year, so before I wrap up, here's a few words from Graeme:
To say the least this has been a pivotal year for me!
Separated from my Ex.
Finding my own home.
Meeting a new lady.
And my daughter Charlotte off to University!
I also have to say that the year has flown by, and I am looking forward to 2019 as a new exciting start in my life.
This year has also brought the sad news of a dear friend's early death just as he had started retirement, and how humbling it was to see his lovely family gather around and support his wife Hazel.
His grandchildren will miss Jim, but there are many fantastic memories and photographs to cherish.
The church was absolutely packed to celebrate his life and he will be remembered by all of us as a truly lovely gentleman.
Badminton will never quite be the same :(
Onto business matters, it has been a delight to take on many new clients this year, and of course seeing clients I have known for 30 years plus.
One doctor I met in 1986 has recently celebrated her 90th birthday, and many turned out to enjoy her party!
Seeing her surrounded by family and friends demonstrated to me what life is all about – people.
Another client, Joy, celebrated her 100th birthday in November!
Here she is celebrating, together with her picture from the Queen.
I wish you all a very joyful, Merry Christmas and fulfilling and peaceful New Year.
And now my bit...
Life definitely seems to be speeding up.
I'm now in my 50th year on this planet and the complexities of life mean that I feel like I have even less free time outside of work and the family.
In other words, there's not much time for 'me'!
I can't complain though - life is rich with variety and the inevitable daily challenges that I face.
I'm grateful for, amongst others:
- My family
- My work
- Clients entrusting me to help them with such an important area of their lives
- The many great professionals I meet through my work
- My friends
- My health and the health of those in my life
- Having the health so that I can keep fit
On the work front, quite a few dental clients have successfully sold their practices this year (or are in the process of doing so) and are now officially on 'wind down', with the majority planning to work another 2-3 years (as part of the hand over) and reduce their hours at the same time.
Thinking of one or two in particular, handing over the business responsibility has certainly put a smile on their faces!
And I must say many thanks to some of our clients who took the time to respond to our survey in October, your feedback was much appreciated!
We've just received the collated anonymous results and will be analysing them in the New Year.
Have a fantastic Christmas and we'll catch up again in 2019 
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Disclaimer
Comments made are based on current tax law and may, (in fact almost certainly will), change in the months/years
ahead. Material supplied has been carefully checked for accuracy but no responsibility can be accepted for
inaccuracies or errors or from subsequent use of this material.
Specific professional advice must always be sought based on your own individual circumstances. As always, the
buck stops with you. The information contained within this email is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
We recommend you take independent advice before making any investment decisions. The writers do not accept any responsibility for any loss suffered by readers as a result of any such decisions.
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Perspective (North East) Limited
Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle Upon Tyne, NE13 6DS
Tel: 0191 217 3340
Registered in England & Wales, No. 4163906. Registered Office: Paradigm House, Brooke Court, Wilmslow, Cheshire SK9 3ND.
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