Your retirement is likely to last 20 years or more. Retirement planning is important as decisions may be irrevocable and could define how you live the rest of your life.
If you start a pension later in your working life, you may have a better idea of what your needs at retirement may be. However, you will have less time to reach this goal, which means you may have to contribute more into your pension each month.
Why should I start planning retirement?
The state pension is unlikely to be enough to provide the income to maintain comfortable standard of living once you have stopped working. In the 2019/20 tax year the State Pension is £168.80 per week and to qualify for full amount you need 35 years of NI contributions. Therefore, you may need a private pension to supplement your income when you retire.
If you are aged between 22 and the state pension age, earn over £10,000 per year and work in the UK you should be offered a workplace pension that is arranged by your employer. Your employer contributes to your workplace pension as well as you. You can change your contribution amount at any time or top up with additional lump sums subject to certain limits.
How much should I save in my pension?
The amount you should save depends on the amount you can afford to save, how many years you have to save and what your income needs will be when you retire.
At Four Wealth Management, our Financial Advisers can work with you to calculate how much money you are likely to need for a comfortable retirement and will help you to achieve this.
Can you pay lump sums into a pension?
You can pay money into your pension at any point, in the form of a lump sum or monthly savings. You will receive tax relief on pension contributions up to £40,000 per year. The sooner you pay in your lump sum, the more time it has to potentially grow and give you more income at retirement. If you are closer to retirement, putting in a lump sum as well as saving monthly will help make sure you have more in your pension pot when you retire.
Adjusting your pension contributions
Things are likely to change as you go through your working life and your Financial Adviser at Four Wealth Management will review your pension situation annually. Adjustments may be needed when there is a change in your circumstances, such as getting married or divorced, when you change jobs or if you cannot work for any reason.
Start planning your retirement today
Your retirement is likely to be a large portion of your life; our Financial Advisers can help you start planning your retirement. Having a retirement plan tailored to your circumstances will help you to have a comfortable retirement and be able to retire when you choose. Find out more about your retirement options.
To book a no-obligation meeting to create a bespoke retirement plan for you or review your existing pensions, call Four Wealth Management on 0117 973 0500.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.