HAVE I SAVED ENOUGH FOR MY RETIREMENT?

Retirement can be a daunting thought. It can cause the best of us additional stress and anxiety as the big day gets ever closer, always wondering if our pension pot will prove to be enough. The amount needed to fulfil your dreams will largely depend on the lifestyle and post retirement plans you have in mind.

How long do you need to work for?

The answer to this will obviously vary from individual to individual, but one thing is clear, the bigger the sum in your pension pot, the earlier you will be able to retire. Some people choose to carry on working for many years after their State Pension Age, often for the very reason that they want or maybe even feel they need to build up a larger sum after their career ends.

It’s also important to consider your workplace pension, especially if you choose to reduce your work hours as you get older. This will have a direct effect on how much you get from the company into your pension. If this concerns you, it’s something you should talk to your employer about.

A recent study by Which?* suggests that you will need around 757,000 in your pension pot to enjoy a ‘luxurious’ retirement, but reports that at least  265,420 would be required to live comfortably, but much will depend upon your circumstances and also where in the country you chose to retire.

Your final pension pot on your last working day is not necessarily the final number you have to just live off, until it runs out. There are ways to grow your money after you have retired.

Your goals are important

It’s worth sitting down in advance to give some detailed consideration to what you want to achieve throughout your retirement. Maybe you are simply looking to cover all your bills and live a comfortable lifestyle without stress or worry. Perhaps you are looking for a more active lifestyle full of activities and holidays which will inevitably eat into your pot. These decisions will have an impact on the amount you need in the pot before you retire.

Looking at creating and itemising your own personal roadmap could help to set these goals and provide a rough estimate on the final figure you’ll require to reach them. The roadmap could include:

• Ideal age of retirement

• What you want to accomplish

• What lifestyle you want to lead – such as travelling or hobbies that may incur costs

We all know life doesn’t always work out to plan. Many things can change over time but having a guide that maps out what you want to do and how you want to live can help make the process of retiring easier. It will give you a clearer idea about what’s needed to navigate your way to achieving your plan.

Quick Tips – How many have you already done?

• It is never too early to start, build up your pension pot as soon as possible.

• Review your workplace and personal pensions to ensure you are satisfied.

• Benefit from workplace pension contributions.

• Increase contributions when life changes occur.

• Add little contributions here and there – every little helps!

• Find old workplace pensions that may have been lost and collate into one pot.

• If you want to check you are saving enough for your retirement then contact your adviser.

* https://www.fca.org.uk/publications/research/financial-lives-2020-survey-impact-coronavirus