How to Plan Your Retirement Income
Posted by siteadmin on Tuesday 2nd of May 2017.
Someone once said that preparing for retirement was as big a challenge as starting your first job, and in many ways, it can be.
In the early part of the last century, retirement was sadly often very short. Thanks to increasing life expectancy, people retiring today could be looking at several decades. That’s why more and more people are taking advice on how to plan their income so that they don’t run out of money in their later years.
The changes in pension regulation that came into force in April 2015 mean that many individuals now have more flexibility at a younger age to use their pension savings in a way that suits them, and to have the type of retirement that they want.
One way to fund a potentially longer retirement is to put back the date at which it starts, and this is a path increasingly chosen by many people. This decision is often prompted by the increases in the age at which workers qualify for the State Pension; by 2020 it will be 66 for men and women and will rise to 68 by 2044.
Budgeting is key
It’s a good idea to take a critical look at your potential expenditure, consider your goals and decide the amount you will need to make retirement a comfortable period of your life. Don’t forget to factor in unexpected expenses, possible gifts of money to family members, the travel you’ve always wanted to do, and give some thought to putting aside some funds that could be used to provide nursing or residential care in the future.
Getting advice pays
Working with an adviser will help you see the bigger picture. They will be able to take an objective view of your finances and can offer valuable advice on important issues such as how to use your pension pot to secure guaranteed income to cover your basic living costs, and how to invest the remainder in a broadbased portfolio to provide the level of income you’re looking for. They’ll ensure that you don’t expose funds you might need in the short to medium term to too much risk, but will consider your longer-term needs and consider factors such as the possible effects of inflation.
Retirement is a big step, so taking professional advice could be the soundest financial decision you’ll ever take.
If you’re making plans for your retirement and would like some professional advice, then please get in touch.
The value of pensions and the income they produce can fall as well as rise.
You may get back less than you invested.