Whatever age you are, there is no time like the present to start thinking about retirement.
Whatever age you are, there is no time like the present to start thinking about retirement. Whether you are considering setting up an independent pension or wondering what your workplace’s pension scheme involves, now is the best time to start preparing for your retirement.
Here is a compilation of the best steps that you can take to ensure that you are covered in retirement.
1. Start Saving
You should start saving as soon as you can. Although you may think that retirement far-off as you struggle through the middle of your working week, preparing for your retirement early will ensure that you have enough in the bank and allow you to get the best interest rates available. For instance, you can make almost £48,000 more if you save £100 a week over 40 years than if you save £200 a week over 20 years through increased compound interest.
2. Shop For Annuities
Although the easiest option may be to get an annuity with your insurance provider, these do not often give you the best rates available.
To ensure that you get the best annuity available to help you in your retirement, you should shop on the open market, which has a 60% difference between the best and worst rates.
3. Track Your Pension’s Performance
Although it may be time-consuming, another step that you should take is to track your pension’s performance over time. This will give you a quick look at your targets and whether you are saving enough to back you up in your retirement. This will enable you to change where our savings are invested and review your circumstances if they are not beneficial to the end amount that you hope to raise.
4. Don’t rely on Equity
By retirement age, your home is the one thing that you can rely on. Therefore, you should think before releasing the equity on it to help you in retirement. Although a popular way to support retirement, there are many benefits, but there are also many negatives which should be considered before you act.
5. Start your Workplace’s Pension Scheme
Your workplace’s auto-enrollment scheme does more than reduce your wages each month. In the long term, your employer can greatly benefit your pension scheme, as they must contribute 0.8% of their profits into pension schemes under the new regulations. Therefore, by opting out, you would be losing an extortionate amount of money that can build up over time.
6. Think about State Pensions
State pensions can help to keep you afloat if your retirement fund goes short. However, they should only be used to back your funds up, and allow you to live in a little luxury in old age. However, state pensions only provide you with £115 pounds a week, so there is no harm in creating an alternative fund for emergencies or to pay outstanding bills.
Do you want to discuss your options with a professional pension advice scheme? Portafina can connect you with a specialist advisor. Alternatively, to read more about your options, follow Portafina’s Facebook, YouTube, LinkedIn, or find @portafina_uk on Twitter.
Disclaimer: The above steps and information are not financial advice. For any financial decisions you need to make, it is highly recommended you enlist the help of a qualified financial advisor.