Tag: planning for retirement


How Planning for Retirement Can Boost Your Health and Wellbeing

Retirement is one of those major life events that can throw up all sorts of emotions, from excitement to blind panic. But your reaction to this looming milestone can depend largely on how you deal with it in advance.

If you’re prepared for retirement and have taken the right advice, you can look forward to your post-working life with confidence rather than anxiety, which benefits both your physical and mental health as the years pass. And this doesn’t have to be complicated…

Financial Advice Can Make a Huge Difference
You shouldn’t need to be a financial expert with a detailed understanding of every product, rule and regulation to make good decisions. But the complexity of the marketplace does make the very idea of financial planning extremely daunting and overwhelming.

That, in turn, can lead to people putting off getting their finances in order and kicking the can down the road.

But ultimately, that doesn’t cure the underlying anxiety people will have about funding their retirement. That’s why it’s so beneficial to speak to a qualified specialist financial planner as soon as you can.

An expert in pension and retirement planning can work with you to identify what you want from life, and from your retirement in particular, and offer advice tailored to your specific needs.

If you know an expert is acting in your best interests and considering your unique wishes and circumstances, you can live your life with confidence, safe in the knowledge that you’re taking the right steps to enjoy a fulfilling retirement.

Get into Good Financial Habits
This is something that any financial planner will tell you early on, as getting to grips with how much you’re earning, spending and saving will put you in a better position to achieve your goals, both in the long and short term.

When it comes to funding your retirement, paying a regular amount into a pension scheme as early as possible will pay off further down the line, particularly as it’s a tax-efficient way to save for the future.

Our finances are coming under unprecedented pressure right now, with rising inflation, energy prices and tax hikes coming together to create a cost of living crisis for many.

But knowing that you’re taking care of your future will help to give you vital peace of mind during these tough times.

Pension Planning Doesn’t Have to Be All-Consuming
As we said earlier, getting your finances in order can seem overwhelming, and even with the best will in the world, you might prefer simply putting it off rather than spending your precious free time going through complex documents.

But it’s actually less of a chore and a drain on your time if you deal with it early, and made much easier if you have a financial planner taking care of all the complicated aspects.

So once you’ve got your plans for retirement in place, you can spend the coming years and decades concentrating on those things that actually make you happy.

The short message to take away from this is that putting off retirement planning isn’t good for you, and planning for the future doesn’t have to be complicated if you work with a financial planner.


How much should I be saving towards my pension?

Research shows that we put ambitious targets on our retirement income and then underestimate how much we need to save to get there.

Before we delve into how much you should be saving, here’s a quick overview of the two main types of pension schemes:

In a defined benefit scheme your employer promises to deliver you an income in retirement. You’ll most likely have to contribute each month too, putting in a required amount.

These ‘gold-plated’ schemes are increasingly rare.

The other type of scheme is a defined contribution scheme. If you have this type of scheme, you will save into this and get contributions from your employer too. The money is invested to build a pot which will then fund your retirement.

If you have a defined benefit scheme, you just need to save as much as your employer says. But with a defined contribution scheme things are a little more complicated… The onus is on you to deliver the money you need in retirement – the more you save, the more you get.

How much will I need in retirement?

In retirement, your outgoings are likely to be lower. For instance, most people will be mortgage free and not supporting children. In the finance industry, there’s a vague rule that some currently aged 40 would need around 50% of their current income to have the same standard of life in retirement.

You should also factor in the state pension. Under the new flat-rate scheme this is worth £155.65 per week (£8,094 per year). So, someone targeting a retirement income of £23,000 would need to contribute £16,000 from their own pensions.

How much should I be saving?

Naturally, the amount you need to save depends on the size of the pension you want. However, it also depends on your age.

For instance, putting 12% of your salary towards your pension might be enough if you start in your 20s, but if you leave it until you’re 40, you might need to pay in closer to 20% to get the same level of income.

It’s sometimes said that the rule for working out what percentage of your salary needs to be going into a pension is half the age from when you started saving. So, if you started at age 30 it would be 15%.

This said, given the variation in salaries and personal circumstances, it can be a good idea to get a slightly more profound insight into your finances. 

You could use some sort of pension calculator. There are plenty of different calculators online that let you play around with the numbers. A quick search on Google will reveal plenty. 

All things considered, this can’t give you quite as clear a view on your financial retirement scenario as speaking to an independent financial adviser. They should have the knowledge and experience to help you get both a clear view of your current situation and the changes you could make so that your money works harder towards your goals.