Retirement planning in lockdown
We’ve had a lot of questions about how the pandemic will affect pension and retirement plans. Like with the crash in 08/09, we’re facing very uncertain and rocky times in the investment markets under the shadow of Covid-19.
As long as you’re needing to withdraw your pension from the markets, sit tight. It’s difficult to log in to your pension value while markets are low or uncertain. It is very important to keep track of your pension value, but best not to check every day!
Retiring this year? Speak to your adviser and plan a disinvestment strategy
This is certainly not a time to fully encash from the markets. However, if you do need to generate income, or want to capitalise on new investment opportunities for your pension, you will need some cash. Stocks aren’t ALL down, just look at the returns for Netflix or Amazon in the last 6-months! It is important to review the investments in your pension before you make any trades.
Cash-in the investments which have performed well and are unlikely to grow any further in the next 12-months. Consider keeping any stocks which have performed poorly – consider the companies concerned, when life returns to normal, will they bounce back? If the company fails further, will it get a bail out or likely be bought by a bigger firm?
The hospitality and travel sectors are struggling, but perhaps it’s time to capitalise? If you have a 3-year investment term, are you confident that life and business will return in that time? If so, buy.
Of course, investment decisions and control are only available in private pensions. If you hold a SIPP or QROPS, only consider regulated funds or direct stocks for investment. If you have a DB plan or a private pension which doesn’t allow a wide range of investments, consider switching to a plan that does.
Take professional pension planning advice
Before you make any important decisions about your pension and retirement planning, or adjusting your investment strategy, its important you take professional, regulated advice. Remember, if you’re professionally advised then you have a right to complain. If you trade yourself, or take ‘advice’ from an unregulated broker or firm, then there will be no one to complain to if things go wrong.