Although people may have very different goals depending on what life stage they are at, their goals can be broadly categorised into essential needs, lifestyle wants and legacy aspirations.
Planning for financial success in each of these areas can be complicated in today’s world. A broad knowledge of everything from complex retirement and investment products to risk management strategies and tax laws is required.
Your financial roadmap should provide you with clarity about your future. It should detail every aspect of your vision – your hopes, fears and goals. It should also describe exactly how your future will look and help you to know exactly where you are headed and when you are likely to arrive.
Take some time and ask yourself these questions:
- Can I sleep comfortably knowing I will have enough money for my future?
- Do I have the security of knowing where I am heading financially?
- Am I going to be able to maintain my current lifestyle once I stop working?
- Do I feel empowered financially to live the life I want today and tomorrow?
- Have I made sufficient financial plans to live the life I want and not run out of money?
- Do I have a complete understanding of my financial position?
- What is my number to make my current and future lifestyle secure?
Make sure you do not run out of money
Initially you need to identify the goal for which you wish to invest and assess the time you have to reach it. Once that is done, it is important to find how much the goal costs today. Add a reasonable amount of inflation to that, and then you would know what the goal would cost you in the year you wish to accomplish it.
This process requires you to understand your number – in other words, the amount of money you will ultimately need to ensure complete peace of mind in knowing your future lifestyle is secure and making sure you do not run out of money before you run out of life.
Growing your wealth
Goals based investing
- Cash flow modelling
- Creating a financial roadmap
- Investment objectives
- Timescales and market activity and the impact of losses
- ‘What if’ scenarios
- Discussing legacy planning with your loved ones
- Inheritance Tax (IHT)
- Inheritance Tax Residence Nil Rate Band (RNRB)
- Lasting power of attorney
- Lifetime transfers
- Making a Will
- Preserving wealth for future generations
- Protecting your assets for the next generation
- Slicing up your wealth pie
- Children’s pensions
- Defined benefit (or final salary) pensions
- Defined contribution pensions
- Personal pensions
- Self-Invested Personal Pensions (SIPPs)
- The state pension
- Annual allowance and lifetime allowance limits
- Busting myths about pensions
- Increases to pension age and new normal minimum pension age
- Pension freedoms
- Pension withdrawal methods
- The lifetime allowance
- Delaying retirement
- Generating income from investments throughout your retirement years
- Importance of a retirement wealth check
- Retirement goal setting
- Retirement planning
- Reviewing your retirement plan
- Staggered retirement
- Taking control of your retirement plans
- What can I do with my pension?
- What happens to my pension on death?
- Market timing
- Minimising risk
- Multiple asset classes
- Portfolio insulation
- Pound cost averaging
- Principles of investing