What is an Approved Retirement Fund (ARF)?
One of the most popular choices for managing retirement savings in Ireland is the Approved Retirement Fund, or ARF. An ARF is essentially a pot of money that you invest after retirement, allowing your funds to grow and giving you the flexibility to draw from it over time.
Maximising your Approved Retirement Fund
The key to managing an ARF effectively is striking a balance between enjoying your money when you’re full of energy and vitality, and ensuring you have enough to last throughout your life. Imagine receiving €30,000 a year when you’re in your early 60s and still eager to travel, take on new hobbies, and enjoy life to the fullest. But then fast forward to your 80s when, instead of maintaining that level of income, you’re left with just €1,000 a year, making it difficult to meet even basic needs. This is exactly the situation we want to avoid.
How to set up your ARF for success
With the right strategy, your Approved Retirement Fund can give you the best of both worlds: the ability to spend freely during your younger retirement years without running out of money later in life. It’s all about carefully planning how you withdraw funds from your retirement pot. By setting up your ARF to maximise returns early on, you’ll have the flexibility to make the most of your retirement while still maintaining long-term security.
In short, an ARF gives you the capacity to truly enjoy your retirement, without the fear of outliving your savings. With proper planning, you can make sure that your money works for you at every stage of retirement, letting you focus on what really matters—living your best life.
How Rockwell manage ARFs
In retirement planning, the goal is to help you enjoy your money when you’re most able to make the most of it. It’s about having a strategy that aligns your spending with different phases of your retirement, ensuring you have enough funds for the good times, as well as any potential challenges down the road.
Understanding the U-shaped retirement spending pattern
One key thing to understand is that spending patterns in retirement tend to follow a distinct curve. When you first retire, your spending is typically at its highest. You’ve got your health, you’re eager to travel, take those long-awaited cruises, make home improvements, or simply enjoy life’s pleasures. But as time passes, your spending naturally starts to slow down. However, as you reach your later years, expenses—especially healthcare costs—tend to rise again. This creates a “U-shaped” spending curve, with the highest expenses happening in the early and later stages of retirement.
Tailoring an Approved Retirement Fund Strategy to Fit Your Plans
To effectively manage this, we work with you to craft a cash flow strategy that’s personalised to your retirement goals. We have in-depth conversations about your plans—whether that’s taking holidays, renovating your home, or even gifting some money to your children. All of these factors are considered as we project your future spending needs. With this information in hand, we use cash flow modelling to figure out how much money you’ll need at each stage of your retirement.
Managing risk with your investments
Once we understand your plans, we then tailor an investment strategy for your Approved Retirement Fund (ARF). Our approach as financial advisors is focused on giving you the reassurance that you can spend your money today while still investing wisely for the future. It’s about striking the right balance—allowing you to enjoy your retirement with confidence, knowing that there are enough funds in place to cover any unforeseen needs as you age, especially medical expenses that may arise in your 70s and 80s.
Ultimately, our goal is to provide you with peace of mind. You’ll have the freedom to spend now, while investing wisely for tomorrow, and the security of knowing that your family and future needs will be taken care of, no matter what. With a well-planned strategy, you can fully embrace retirement, confident that your finances are in good hands.
