Retirement is the time that we spend our whole lives working towards – the golden years. Many people think of it as the end of our lives but in reality, you’ve probably still got another 20 or 30 years ahead of you.
Whether you’re 20 or 50 years old, it’s never too early or too late to start planning for your retirement. The earlier you plan, the more likely you are to achieve financial security but if you’ve left it late then it’s still important to do what you can.
There is so much to consider when planning for retirement that it can be worth utilising financial websites, such as Money Vista. They have lots of tools and guides to help you plan your finances and prepare for retirement.
Saving for the future
The basic state pension is currently £110.15 per week for each individual person but that’s the absolute maximum you can expect, unless you have topped up. This weekly amount often represents a significant drop in income compared to your current salary.
Personal, individual and company pension schemes can drastically increase your pension pot and income throughout retirement. In most cases, company pensions are a better option as the employer usually matches your contributions, if not exceed them.
To find out how your finances look, you can request a state pension forecast from the Pension Service. If you have another pension, you should receive an annual statement of your fund’s performance.
Pension options
If you have a personal or company pension, you will be able to exchange your pension pot for an annuity at the point of retirement. You are able to take a cash lump sum of up to 25%, before swapping the remainder for an annuity.
State pension claimants can boost their income by staying in employment past the official age; you won’t have to pay any further National Insurance contributions and you’ll benefit from a higher income when you finally down tools.
Lifestyle during retirement
Retirement planning is absolutely essential for anyone that wants to achieve a comfortable lifestyle once their working life comes to an end. One of the first things to think about when preparing for your later years is the type of lifestyle you would like to achieve.
If you have been used to a high quality life, with the financial freedom to do as you please, or if you’ve been striving towards a better future, you will need to ensure you are able to fund that lifestyle. If you’re an active person that dreads the day you’ll no longer have to set your alarm, you can delay giving up work and continue earning. This could even help you top up your finances – especially if you decide to work part-time whilst drawing your pension.