The Best Way to Plan for Retirement

Plan For Your Retirement

Retirement planning ensures that, when you finally leave work, you have enough money to live a long and happy retirement. If the UK, you are legally entitled to the state pension when you turn 65. A tax year, in which you have earned enough and is treated as having paid or have been credited with National Insurance contributions, is referred to as a qualifying year. It is worth to start contributing to a pension fund as early as possible once you start working. If you start putting £10,000 per annum into a pension plan at the age of 30, you will be able to receive £713,000 at the age of 60. If the regular annual contribution was delayed by 5, 10 or 15 years, your pension fund value will be reduced significantly.

If your company does not offer a pension scheme, you need to consider retirement planning carefully. You can set up a private stakeholder or a personal pension. Government in 2001 introduced stakeholders’ pension to make pension plans cheaper and more flexible. It is open to everyone. You can contribute as little as £20 per month. You need not contribute to the plan every month, if you are not able to do so. You can take out this plan directly from a number of providers and the fee charged is 1.5% per year.

As you progress in your work life, you may change employers or become self employed. You may therefore have a range of private pension plans, making your retirement planning difficult. The best way to plan for your retirement is to review your private pension funds regularly. You need to analyse whether the funding level is adequate and the investment risk is appropriate. You also need to ensure whether the investment performance is competitive and the charges offer good value for your money. You can even consider transferring your private pensions to something more suitable to your present situation and in line with future plans.

If you want to receive more than the basic state pension when you retire, you can consider self-invested personal pension (SIPP) for retirement planning. SIPP lets you take control of the investment choices within the plan. Stocks, shares, investment funds, commercial and residential property are some of the possible investment choices. SIPP provides great flexibility and various tax benefits. You need to start your SIPP with a minimum of £10,000 and can make further contributions, whenever possible. The minimum contribution amount is £200.

You can go for a pension annuity, which is a plan for the time when you retire. It offers you a retirement income in the form of regular payments for the rest of your life. Investment linked annuities, with profit annuities and enhanced annuities are some of the common types of annuities. While making retirement planning with pension annuity, you need to be very careful in choosing the right annuity that changes your retirement income significantly. This helps you get financial security in your old age. It would be wise to speak to a pension advisor about retirement plans.

If you need help with Income Drawdown and Pensions, contact the experts at Joslin Rhodes. We are an experienced, dedicated and professional financial advising company who have wide experience in the field of Pensions and Retirement Planning