When do you plan to retire?
Retirement may seem like a lifetime away for some, for others it may be within the next few years. It doesn’t really matter how old you are, you only get the one chance to prepare for it and anything you do today will make a difference when you finally decide to stop working and enjoying life to the fullest.
15th September was Pension Awareness Day. Why, have a national day dedicated to pensions? Well – it’s simple – the UK is facing a challenge, we’re not saving enough for the future and that means we’re unlikely to be able to retire when we want to. Pension Awareness Day was created to spread the message that it’s time to take your future into your own hands! #PensionAwarenessDay
The state pension age is currently getting later and later and that means you’re likely to be working for longer before you can claim the state pension. You can check when you can claim your state pension here: https://www.gov.uk/state-pension-age
If you don’t want to rely only on the state pension, there are a number of options open to you to help you live the life you want to lead, we wanted to share some tips on what you can do to make sure you’re ready to retire:
There are a number of types of pension available and they usually give you tax relief on the contributions you make and allow you to take a quarter of your benefits tax free when you retire which may not always be the case with savings and property.
There are a number of different types of pension, these include:
- State pension
- Company/Workplace pension
- Personal Pension
- Self-Invested Personal Pension (SIPP)
- Stakeholder Pensions
The most common is the state pension and Company/Workplace pension. Auto enrolment which was bought in to help eligible employees to save for a pension means your employer will usually contribute to and may match your own contributions which increases the funding of your pension.
Do you know how much income you’re likely to want when you retire?
Many of us build lifestyles based on the salaries we receive but what happens when those stop? Can you afford to maintain your lifestyle? Have a think about what you’d like to live on during retirement. You might find your spending habits become very different after you’ve retired compared to what you currently spend whilst you’re working.
You don’t want to hit your retirement age and find that your pension savings don’t give you enough to maintain your lifestyle so you really need to think ahead, plan and regularly review your retirement plans.
Have you got more than 1 pension?
These days – a job for life is very rare. For those lucky (or unlucky) enough to stay in one job, they’re likely to have just the one pension. But, most people tend to have worked for a few different companies throughout their lives, if you have, you’re likely to have pension schemes in a number of places so it is important that you check for any ‘forgotten pensions’. Have a look through your career history and check all previous jobs for pensions you may have.
If you’ve moved to a new house, check all pension providers know your current address.
None of us have a crystal ball to see the future unfortunately but planning ahead will help you to make sure you’re financially secure and can live the life you want to lead. With the rising costs of university fees, your children may need help to get through university, their first homes, their weddings. These are significant ‘one off’ costs that you may want to help your family with. Factoring these into your plans will help you truly understand what you need in the future.
What do you already have?
Consider what savings and investment plans you have that could be used towards your retirement too. It’s really important that everything you’ve saved to date including equity in your property isn’t lost and is helping you create your plan. This will help you figure out what level of risk you can afford to take with your savings if you choose to invest.
We’re here to help
All this planning can involve a lot of number crunching and paperwork. If you would prefer someone else to do this for you or simply want to discuss your pension arrangements, you can speak to an Independent Financial Adviser. They’ll be happy to review your current pension status and can help you make more informed decisions taking into account your full financial circumstances and your attitude to risk.
Planning can make a big difference and shape your future. If you’d like to speak with one of our advisers about reviewing your pension savings or your options at retirement, please get in touch, we’d love to hear from you.
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