With the introduction of the pension freedoms people now have more control over their savings which means it’s more important than ever to plan for your retirement, below are five tips to consider.
Locating your pensions
In today’s work environment it is unlikely that any individual will stay employed with one company throughout their working lives. When employment changes all too often the pension benefits left behind can be forgotten. The first step will be to make contact with these past employers or scheme providers to find out the current value of these.
Review existing pensions
It’s vital to find out how each of these investments is performing. This will help give you a better indication of what amounts you are likely to receive when you retire. Over time your investments will rise and fall so it is essential that you are aware of how they are performing. Keeping track of all your pensions can help you determine if the plans are giving you the return required to provide the retirement lifestyle you want. Seeking professional pension advice is one way to understand just how well your current pensions are performing.
Create a budget
One of the best ways to plan for you retirement is to create a budget. List all of your assets as well as any debt, this will help you to work out how much you are going to need in retirement. This way you will be able to live a balanced lifestyle, paying bills and enjoying life’s luxuries.
The important thing to remember (as with any budget) is to make sure you are able to live within your means. Don’t stretch yourself too much and make sure to review regularly.
How will you access your income?
Another key step in the planning process is understanding how you will access your income. Pensions have become more flexible and people can now access their savings in a number of different ways such as pension drawdown or buying an annuity. With pension freedoms, from the age of 55 you are, usually, able to take a 25% tax free cash lump sum, this has given those close to retirement more options as to how they spend their savings.
Get the right help
Not everyone will understand the financial implications or benefits of having a pension, or even transferring to a potentially better performing fund. That’s why getting professional pension advice is the best course of action. Here at Pensionlite we have an expert team of experienced advisers who can provide no-obligation advice via post, email and telephone.