Q. I am a 40 year old female dentist, and am finding that my NHS work is decreasing, while my private work is very much growing.
I need to make sure I have enough income at age 55 plus, when I plan to slow down at work then stop at age 60.
Therefore my pension planning was looked at recently by my financial adviser.
She kept talking about the ‘cost of delay’, and how I should act now, although I have other priorities for the next year or two. She also stressed the tax relief available which my accountant agrees with.
What view do you have?
A. Ok, lets look at this.
You say in your letter that your adviser has not checked your NHS or State benefits. Neither has she asked you to complete a detailed expenditure template showing what you will need after age 55 to live the life you want to.
So, our opinion is that this needs to be done as a priority.
If you don’t know where you are and you don’t know where you are going, how on earth can anyone advise here? One major factor is that you will have a practice to sell, and this will clearly help with your retirement planning
- again this was not taken into account.
Also, tax relief alone is no reason to buy more pension.
On the subject of the ‘cost of delay’, lets look at some figures.
Presuming monthly investments at the same level, and you started now, you could receive a pension 76% higher than if you waited 5 years. For a 10 year delay, you could receive a pension 311% higher if you started now.#
Of course, if you know you will have extra monies to invest in a few years time and still need to save into a pension, then this may well be the right answer for you.
We would advise you find a fee based financial planner who will cover all the above and more. They will charge you a fee to build you your own strategy for life. Whether you need more pension planning (or not) will then become clear.
We wish you well.
# Presuming investment growth of 6% after charges and levels of investment do not change.
