23rd October 2012 at 8:41am
Celebs and rock stars might be happy working way beyond retirement age, but the rest of us are looking forward to putting our feet up. But can we afford to?
Rock stars in retirement
Working into your seventies, eighties and beyond isn’t unusual in the public eye. Tom Jones continues to belt them out at the age of 72; Bruce Forsyth remains the star of Saturday night television at 84; and at 91, Prince Philip still carries out his fair share of royal duties. All rock stars!
But, although the retirement age has been abolished so you can work as long as you like, the prospect of working right up until the end isn’t one that most of us relish. Enjoying retirement, whether this means taking things easy, taking up an extreme sport or becoming a rock star, is much more likely to be on the agenda.
Plan for a long retirement
Whatever your dreams, it’s sensible to plan for a good, long retirement – improvements in healthcare and standards of living mean many of us can expect to enjoy at least 20 years in retirement.
Funding this is no mean feat but, whether it’s a long way off or just around the corner, there are ways to ensure your retirement savings are in line with your plans.
Keeping tabs on how much you’ve saved and increasing it whenever possible could help to boost your pension pot – especially as the government adds tax relief, currently topping up a £100 contribution to £125. The amount of tax relief does dose depend on personal circumstances and this may change.
Even if retirement’s close, you can still boost your retirement income. As well as making the most of those final contributions, explore the different ways to take your pension benefits. You can choose between an annuity or income drawdown, with your decision determining how much you’ll receive.
Annuities are changing too, which may also affect your pension income. Under the EU gender directive, which comes in on 21 December, insurers won’t be able to take gender into account when they’re setting annuity rates. This will mean that while men buying an annuity after that date are likely to be a little worse off, women should see an increase in the amount they receive.
But whether you’re male or female, 25 or 75, taking control of your retirement savings will help give you the freedom and flexibility to enjoy those later years.
What do you think?
What are your views on retirement?
If you’re unsure about your options at retirement, take a look at our ‘Retirement Options – What’s The Difference?’ article.