How to maximise your retirement income
How do you work out exactly how much money you need for your retirement?
How do you know how much you’ll need to live on?
What other things should you think about?
We currently live in a buy now, pay later society, where the option of borrowing is readily available. While borrowing – student loans, credit cards, mortgages and car purchase agreements – might have got you through life so far, it won’t fund your retirement.
The best thing you can do is make a plan for retirement as early as possible, so you aren’t caught short. To work out how much money you might need in retirement, you need to ask yourself what kind of retirement you’d like to have and also consider some of the not so desirable aspects of retirement and old age. Will your plan include travel, part-time work, hobbies, shopping, eating out, nice cars, dependants, grandchildren, downsizing your home, ill health, care and funeral costs? It’s a lot to consider.
A simple place to start is by basing your financial needs in retirement on your current lifestyle and adapting it to suit the ’retired’ you. There are online tools available to help you do this. For example, Aegon’s Retirement Planner could provide you with some really useful insight into what to consider when shaping your retirement income plans.
10 Tips for Retirement Planning
- Don’t delay. Make a plan consider all your pension and savings.
- Borrowing for retirement isn’t an option. Start saving as early as possible.
- Work out how much you’ve saved in pensions and other savings you’ve targeted for retirement.
- Get a State pension forecast online or visit pensionwise to find out more.
- Think about consolidating some of your pensions into modern low-charging pensions. You should be comfortable with the investment choices that you make as you may lose features, protections, guarantees or other benefits when you transfer. If you’re not sure, you should get financial advice - there may be a charge for this.
- Work out what retirement income you need. Use online tools and calculators. For example, Aegon’s Retirement Planner.
- If you’re not on track for the retirement you want, consider how you could top us your savings or save more.
- Regularly review your plan and your pension and savings accounts.
- Monitor how your investments are performing.
- Get professional advice. An independent financial adviser will be able to give you advice based on your personal circumstances. This may incur a charge.
The Retirement Planner can be used by anyone, at any stage of life, looking to better understand what their current savings might be worth when they come to retirement and the options you have.
The bottom line is, don’t delay when it comes to your retirement plans. A financial adviser will be able to give you recommendations and advice based on your personal circumstances. You can find a financial adviser near you by using unbiased.co.uk or findanadviser.org.