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Retirement Planning
Can you afford your retirement?
As healthcare and living standards improve, so does our longevity. A male aged 65 is now expected to live to almost 83† and a female even longer. This, along with the attraction of early retirement, means some of us could be looking forward to a happy retirement lasting perhaps more than 30 years.
At the same time, however, birth rates have been falling. Fewer couples are having children – and those who do are having fewer and leaving it later†. As a result, a thriving workforce that was once more than able to support our elder population is becoming far less able to do so.
So, whilst we may be looking forward to long and carefree days, finally free of the rat race, the question needs to be asked – is our pension provision good enough to pay for it?
How much will you retire on?
We all look forward to enjoying the spoils of a comfortable retirement after years of working. However, whether you end up living in the lap of luxury, or having to count the pennies, is determined by the decisions you make for your savings. Before you start dreaming of your long and happy retirement, take some time to consider how you are going to pay for it.
Why use pension schemes?
Pension schemes such as Stakeholders, Personal Pensions and SIPPs (Self Invested Personal Pensions) are tax efficient ways to build funds for retirement. They attract tax relief on contributions to them and grow virtually tax free.
From April 2006 (‘A’ Day) more flexibility was brought into pension rules, giving you more control over how much you can invest and where it can be invested. There is also now much more choice in how the benefits can be withdrawn from age 50 onwards (age 55 from April 2010).
Take stock
The first step towards getting on track for a decent retirement is to understand where you are now. Your pension fund could end up as one of the largest assets you have, but how much is it actually going to pay you? £10,000 might buy you a one-off luxury trip round the world, but it is not so impressive if you need to plan many years of holidays.
How many companies have you worked for and left partly funded pension plans with? How many plans have you taken out yourself? What other provision do you have – e.g. savings accounts, investment plans, perhaps a second house or even your own business?
Get yourself on track
Then you need to take charge. The earlier you start the longer your retirement savings
have to grow. This will make you much more likely to build a reasonable pension
fund and therefore increase the choices you’ll have when you retire.
How Inspired Advice can help
Our pension review service is designed specifically to help you take charge of your own retirement plans. We take a comprehensive look at what provision you currently have and tell you if it is set up in the most appropriate way for you. We will look at the charges levied by your providers and the current risk profile of your investment.
If you are or have been a member of final salary schemes we can calculate the retirement benefits you should receive and offer advice on any shortfalls you wish to make up.
By using simple risk questionnaires and discussing your personal views we can establish your tolerance to risk. This will allow us to recommend the ideal mix of assets that your pension fund should invest in.
We have specialised pension software that will enable us to project any existing pension polices through to your chosen retirement date. By quantifying any shortfall we can tell you how much you should ideally be contributing to give you the retirement you want and suggest the most suitable pension contract to use.
For more information, please give us a call on 020 7907 4520 or contact us via our contact form and we can outline the possibilities for you, without obligation.
† Source: National Statistics Office and Government Actuaries Department, Life tables published in 2006, based on 2007 estimated figures for life expectancy.