3 useful lessons climbing a mountain can teach you about saving for retirement
At Macmillan Financial Planning, we’re no stranger to mountain climbing, and we know many of our valued clients also enjoy scaling the peaks of the Highlands and beyond.
Our office is based in Ross-shire, and Beinn Eighe, Càrn Eige and Liathach are just three of the many spectacular mountains on our doorstep. Though these impressive peaks are a pleasure to climb, they can be formidable, and you shouldn’t approach them lightly.
In fact, there’s a lot you can learn about saving for retirement from climbing. May is National Walking Month, so what better time to learn three useful lessons mountaineering can teach you about saving for your retirement?
1. The climb down is just as important as the climb up
In 1924, George Mallory and Andrew Irvine embarked on an ill-fated expedition to summit Mount Everest. At the time the world’s tallest mountain remained unclimbed, but the duo was among the first to use oxygen canisters which many thought could be the key to finally conquering Everest.
On 8 June the pair made their final summit push. Geologist Noel Odell watched as Mallory and Irvine disappeared over the Second Step. Odell then waited for them at the North Col, but two days later they still hadn’t returned.
We’ll never know whether the duo ever summited Mount Everest. Odell thought it likely they had, writing: “Considering their position when last seen, I think myself there is a strong probability that Mallory and Irvine succeeded".
However, as they never came back down, there was no way of knowing, and Tenzing Norgay and Edmund Hillary would go on to complete the first certified summiting of Everest in 1953.
This story illustrates how getting to the top of a mountain is not the be-all and end-all. You also need to have a plan, and enough energy and provisions, to get back down.
During your working life, you’ll likely be focused on ensuring you’ve accumulated enough wealth to reach all your life goals. However, thinking about how you’ll withdraw from and gradually decumulate your pension pot is also very important.
Pension Freedoms mean you have a lot of flexibility when accessing your pension. Depending on your desired lifestyle and retirement goals, certain methods may be better suited to you.
At Macmillan Financial Planning, we can help you devise a tax-efficient way to withdraw from your pension that will sustain you throughout your life. We’ll also factor in the activities and hobbies you want to pursue in retirement, helping you successfully descend your own mountain.
2. Small, steady steps will get you to the top
There are no shortcuts when mountain climbing. Whether you’ve just started your hike, or you're exhaustedly approaching the peak, there’s only one way to get closer to the top – by putting one foot in front of the other.
Thinking about saving for retirement in this way can be beneficial.
We can work with you to calculate the amount of money you need to retire comfortably. You can think of this “number” as your summit. It may perhaps seem large at the outset – just as a mountain towers over you when you’re standing at the foot – but by making regular, manageable contributions to your pension year in and year out, over time your pension pot will grow in value – hopefully to be large enough to sustain your desired lifestyle.
By contributing to your pension regularly throughout your working life, you can also benefit from compound returns. This could mean any contributions you make today may be worth more when you come to retire. You’ll thank your younger self when you reach the “peak”.
3. Seek advice from experts
It’s always a good idea to seek advice from experts when preparing for a climb.
You could do this by reading guidebooks or articles written by experienced mountaineers. While this can be useful, nothing compares to sitting down with a veteran climber and picking their brains about what gear to bring, which route to take, and the best time of year to ascend.
The same is true of your finances. To build a strong financial future, it can be beneficial to seek advice from experts.
You could read up on topics like pensions, estate planning and investing. However, just as with preparing for a big climb, nothing beats talking to an expert financial planner in person.
At Macmillan, we can use our years of experience and in-depth knowledge to advise you on every aspect of your finances and help you devise a plan that gets you to your mountaintop.
Get in touch
If you’d like some expert advice on how to successfully summit your retirement mountain, get in touch.
Contact us by emailing info@macfp.co.uk or calling 01349 832849.
Please note
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.