Simon Cosgrove, specialist dental financial adviser from Wesleyan Financial Services, answers the golden retirement planning question.
As a financial adviser, this is one of the most common questions I get asked – but it’s also one of the most difficult ones to answer. Ideally, there would be an answer that suits all circumstances. Unfortunately, that’s not the case.
Everyone’s situation and expectations are different when it comes to retirement planning, and this is doubly true when it comes to those with a career in dentistry, the reasons for which I’ll break down later in the article.
However, there are plenty of considerations that can point you in the right direction when it comes to finding out that golden number – the retirement income threshold needed to be able to hang up the loupes for good.
Break this down into three key questions you need to ask yourself:
What do you want to do when you retire?
People are often under the misconception that retirement planning is all about the numbers, but you really need to start with your goal – what do you want your retirement lifestyle to consist of?
If there was a sliding scale between a modest lifestyle, perhaps pottering in the garden and spending more time with family, or a lifestyle that needs significant funding, such as exploring more of the world or indulging in hobbies and some luxuries, you need to identify where you sit.
This will then form the foundation of your retirement planning.
What are your personal circumstances?
As mentioned earlier, there’s no one-size-fits-all approach when it comes to retirement planning – what works for your colleagues or friends might not necessarily work for you.
For dentists, retirement pots have an extra layer of complexity due to the variety of income streams available – whether that be the NHS pension scheme, a personal pension, investments, your dental practice as a retirement nest egg, or a mixture of some or all of the above.
When you begin scratching the surface of these provisions, such as the NHS pension scheme, there’s even more to grasp. With three parts of the scheme in operation, it’s not the easiest thing to understand.
Then, outside of dentistry, your personal circumstances have an impact – do you still have financial dependents or are you still paying off your mortgage? Your household expenditure – household bills and essential spending – will dictate a certain threshold you’ll need to meet.
With clients, I run something called a cash flow analysis, which is where we have a look at how much you earn now, what your lifestyle and essential expenditure is and what’s going to change in retirement because a lot of it will change.
Have you built in some financial flexibility?
Remember – and this is very relevant at the moment – that the cost-of-living crisis is showing that the essential expenditure, even if you plan for it, can increase very quickly and be different from even expert predictions.
I would suggest keeping in mind that you may need to do a projection to account for increased costs of living in the future. Building in some inflation-proofing and a safety net just in case, particularly to cover the essential side of your finances, will help you make sure that you can still cope no matter how life changes over the years.
Seek support from specialists
Retirement isn’t just a one-point decision where your financial plans will be shielded from change – personal, professional and external factors can easily knock even the best-made plans off course.
It’s important to review your retirement plans regularly – your initial plan might not have evolved with the times to enable you to achieve your financial objectives.
If you need help setting up or reviewing your retirement provisions, you can book a no-obligation financial review with a Specialist Financial Adviser at Wesleyan Financial Services by visiting www.wesleyan.co.uk/dental or calling 0800 316 3784.
Advice is provided by Wesleyan Financial Services Ltd.
‘WESLEYAN’ is a trading name of the Wesleyan Group of companies.
Wesleyan Financial Services Ltd (Registered in England and Wales No. 1651212) is authorised and regulated by the Financial Conduct Authority. It is wholly owned by Wesleyan Assurance Society. Wesleyan Assurance Society is authorised by the Prudential Regulation Authority. It is regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Incorporated in England and Wales by Private Act of Parliament (No. ZC145). Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Fax: 0121 200 2971. Calls may be recorded to help us provide, monitor and improve our services to you.
