
Pension & retirement
Chartered Financial Planner, Hannah Rogers explains how and why to revisit your retirement plan.
If you are in your 40s or 50s, it’s likely that you will have been contributing towards your pensions for decades now. You may have accumulated multiple workplace pensions at this point. And you could have investment strategies in place with one eye on your retirement.
But when was the last time you thoroughly examined your pension and retirement plan?
A comprehensive, documented retirement plan will help you feel prepared for the future. Giving you peace of mind that you will have sufficient income when you take a step back from working.
Throughout this article, we explore the key considerations for reviewing your retirement plan. And if you don’t have a plan in place, this will be a helpful starting point.
Retirement looks different from person to person. Maybe you’re looking to spend more time with your family; travelling to your bucket list destinations might be high on your agenda; or maybe you’re looking to start a new hobby, or even a new business.
Knowing what you actually want to do in your retirement is key. You can then start to determine how much money you will need. The more granular you be, the better. You will need to take everyday expenses, such as mortgage payments, household bills and even your grocery shopping into account.
Set savings aside as a contingency plan too so that if there are any emergencies, medical needs or care plans which you need later down the line, you won’t have to worry.
Factoring inflation into your plans is always a wise move. As the last few years have shown, inflation rates can fluctuate dramatically. By taking inflation into consideration, you will build a really solid foundation for your retirement.
Plans can easily change, especially when it comes to retirement. External factors may force you to retire earlier or later than you originally planned. Therefore, it is worth revisiting whether you would still like to retire at the same age as you had originally planned to.
Once you know your answer, you’ll need to decide on how much money you will need to sustain the lifestyle you desire throughout retirement.
Divide this number into an annual salary and then a monthly income. This will help you to see if your savings will see you through.
It’s more than likely that you have multiple pensions as part of your retirement plan. A combination of your personal pensions, workplace pension, state pension, ISAs and investments could all constitute part of your plan.
These 4 quick tips should be kept front of mind, when reviewing your overall retirement pot:
Regularly reviewing your retirement plan is always a good idea. It will ensure that you are on track to achieving the retirement income you need in order to live the lifestyle you want.
An annual review is usually sufficient. It is regular enough to ensure that you can accommodate any changes in priorities or circumstances. But it also gives you enough of a break to ensure you don’t become anxious about the health of your pension and short-term performance.
If you are eligible for State Pension, the amount you receive will depend on your National Insurance contribution record.
It’s unlikely that the State Pension alone will be able to support your retirement. You can check your State Pension forecast to see how much you could receive, when you can claim it and if you can improve it here.
In the UK you can access some, or all of your pension benefits from age 55. This will increase to 57 from April 2028 onwards.
Your own unique circumstances will influence which income option is right for you. It’s worth noting that some contracts will restrict your options, and there are tax implications to consider too.
Your retirement plan will be entirely unique to you, your current position and future aspirations. We’re here to help you create a watertight retirement plan, helping you navigate your financial future with confidence.
Whether you’re starting your retirement planning from scratch, or you’re checking in with plans you have already made, our team of advisers are here to support you.
THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.