4th September 2014 at 12:00pm
Want to enjoy life after work? Don’t wing it, plan it
We all look forward to stopping work, embarking on a new path and making the most of our new found freedom. To ensure we are in the best position to do this it’s worth putting plans in place as early as possible.
Getting ready for retirement doesn’t start in the days and weeks before you stop work. With a bit of early planning, regular reviews – and taking action when you need to – you’ll be able to keep your retirement plans on track or even choose to stop working sooner.
Ask yourself these 3 simple questions when planning for your future?
How long will I be retired for?
According to the Institute of Fiscal Studies 58.5%* of workers haven’t given any thought to how long their retirement could last. A 65 year old can now typically expect to live for about another 20 years. That could mean you’re retired for almost as long as you’ve been saving for retirement. Be clear when you want to stop working but think of your pension savings as deferred pay and budget accordingly.
How much do I need to invest?
Paying more into your pension may not necessarily be top of your to do list. It’s tempting to think it’s something you need to worry about in the future. You need to be investing as much as you can for as long as you can. Make every year count.
To find out how much you might want to invest, use our retirement tool or consider the rule of thumb – save half your age as a percentage of your salary.To find out how much you might want to invest, use our retirement tool or consider the rule of thumb – save half your age as a percentage of your salary.
Maximising tax allowances can also make retirement funds last longer. As well as contributing to your pension pot, you can use other savings and investments to help fund your retirement. Getting some expert advice can help you manage unexpected tax bills and provide knowledge of the tax allowances available to you from other investments.
How will I stay on track?
Once you’re investing it’s also worth keeping sight of your retirement goals to make sure you’re on track to meet them. 74% of under 45s with pensions have no idea what their pension pots are currently worth and 79% say they don’t know what income they are expecting when they retire. These figures suggest many people don’t really know the true value of their pension until they are older and in the run up to retirement, despite the fact that they are likely to be receiving annual pension statements. Regularly review your pension.
Preparation is everything
The old motto still rings true when it comes to retiring. The earlier you start your preparations, maintain your progress and keep focus on your goals, the more confident you can feel you’re making your money work hard to safeguard the life after work that you deserve.
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This blog and any responses are not financial advice.
All figures unless otherwise stated are from YouGov Plc. Total sample size was 2018 adults, of which 1361 have a pension. Fieldwork was undertaken between 9th – 12th August 2013. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).