Whilst many people know that they should save more for their retirement, they manage to keep putting it off and don’t check what level of income they are likely to receive when they stop working.
Some people could be sleepwalking their way towards a retirement where money could be tight. A recent survey conducted by Aegon6 found that less than a fifth of adults aged 55-64 have more than £300,000 in their pensions – the average amount widely considered to be necessary for someone to maintain their current lifestyle.
GET A PLAN IN PLACE
Drawing up a budget that covers your likely spend and setting that against the income you can expect to receive from your pension(s), savings and investments is a good place to begin your retirement plan.
You need to think about the income you’re likely to need during the first few years of your retirement, but also plan for a time when you might need to pay for help or care.
THE STEPS WE ALL NEED TO TAKE
It seems that people often put off finding out how much they have saved in their pension because they fear it will be bad news. However, there are some simple, practical steps that can really help, like topping up your contributions whenever your financial circumstances allow, as within limits they attract valuable tax relief. Make sure you know your State Pension age and get a forecast of how much you’ll receive.
Carrying out a reality check and scheduling a review with your financial adviser is the best way to keep your retirement plan on track.
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.
The value of investments and income from them may go down. You may not get back the original amount invested.