At some point we’re all going to retire – the big question will be, how much will we have to live on once we stop working?
According to the FCA’s Financial Lives Survey 2017 a staggering 75% of all UK adults not retired have not considered much, or at all, how they will manage financially in retirement. Below are five considerations when it comes to planning for your retirement.
1. Don’t wait
The last thing those people entering the workforce will be thinking about is their retirement – but the sooner you can start paying into a pension the better. This will mean your savings will have more chance of growing, leaving you with a comfortable sum to live on post retirement. The longer you leave it the more of a contribution you will have to make the older you get.
2. Budget accordingly
Any financial planning will need a budget so think about how much you will need to be able to live comfortably. The biggest mistake is to underestimate this figure which may leave you needing to go back to work or even sell assets in order to fund your retirement. When it comes to budgeting think about living expenses but also factor in those luxuries such as holidays, home renovations or even a new car.
Many people are investing in the property market as a possible income for when they retire. While this might seem like a clever option you need to bear in mind that over time the property market will go up and down so you shouldn’t be totally reliant on the equity in your home.
4. State pension
The majority of people will have a state pension, but this is probably not going to be enough to manage your lifestyle in retirement, which is why it’s important to seek pension advice for investing in other avenues.
5. Pension providers
Another consideration is knowing which providers your pensions are with. If you’re unsure, how will you know what the value of them is and how they are performing? It’s a good idea to keep an eye on them as this way you’ll be able to keep track of any pension charges which could have a negative effect on how much you will be entitled to in retirement.
Seeking professional advice
At Pensionlite our team of financial advisers has a wealth of experience managing and advising clients about their pensions in both the accumulation of funds and accessing them post retirement. Get in touch to book a no obligation consultation.
The value of your pensions, investments and the income they produce can fall as well as rise. You may get back less than you invested.
Transferring out of a Final Salary scheme is unlikely to be in the best interests of most people.