\u2018Will I be able to afford the retirement lifestyle I want?\u2019 is a question that many people ask but struggle to figure out. There are many ways to assess your likely income in retirement and work out how much you need to put away now to enjoy the kind of lifestyle you want in later life.<\/p>\n
Funding a comfortable retirement will be the biggest financial priority for many people, yet some people spend more time planning their holiday than their own retirement \u2013 perhaps because planning for retirement seems too complicated to think about?<\/p>\n
We know that we want an active, comfortable retirement but often don\u2019t know where to start the savings and investment process. The starting point is to obtain professional financial advice and set a plan in motion that is reviewed at least annually to enable you to build the future retirement you want.<\/p>\n
Everybody\u2019s circumstances are different, but the key considerations for most people when they think about retiring will come down to factors such as whether they\u2019re renting, paying a mortgage, have any debt, plan to keep working, and how much money they have saved in pensions and other investments.
\nIt\u2019s also important to bear in mind that your life changes when you retire \u2013 and so does the way you spend your money. The increases in the cost of living with inflation are another important consideration. While the State Pension increases with inflation (with the \u2018triple lock\u2019, increases can exceed inflation), income from your pension might not, depending on how you decide to take your money.<\/p>\n
If you start saving for your pension early in your working life, it may be difficult to predict what your needs will be when you retire. Ideally, you should aim to put away as much as you can afford, but don\u2019t worry if it\u2019s not as much as you\u2019d like to start with. It can be better to save small amounts that have a long time to grow in value. As your income improves, you may be able to increase how much you put away for your pension.
\nIf you\u2019ve started to save later in your working life, you may have a better idea of what your circumstances are likely to be, which can make it easier to work out what level of income you\u2019ll need for your retirement. However, you\u2019ll have less time to save it up, and the amount of money you\u2019ll need to save may be higher.<\/p>\n
Saving for retirement is essential if you want the financial freedom to enjoy your later years.\u00a0Things to consider include:\u00a0 <\/strong><\/p>\n Remember: you\u2019re perhaps unlikely to have a mortgage and other big expenses at this stage in your life, so you may need a lot less than you do when you\u2019re working. The ratio tends to go up for those on lower salaries, as you\u2019d expect.<\/p>\n Next, you want to work out how big your pension pot needs to be in order to achieve the retirement income you want. One rule of thumb is to take the annual retirement income you\u2019d like \u2013 let\u2019s say it\u2019s around \u00a350,000 \u2013 and then multiply that by 20. So in this example, to achieve a retirement income of \u00a350,000, you\u2019d need to build up a pension pot worth in the region of \u00a31,000,000.<\/p>\n You can receive income tax relief on your own contributions to pension plans. You can contribute up to the greater of \u00a33,600 and 100% of your salary.<\/p>\n The standard annual allowance is currently set at \u00a340,000 for the current 2016\/17 tax year (higher earners or those who have flexibly accessed their pensions may have a lower figure). If the contributions paid on your behalf (including any employer and personal contributions) exceeds the standard annual allowance, then you may have to pay a tax charge based on the highest rate of Income Tax that you pay.<\/p>\n A PENSION IS A LONG-TERM INVESTMENT. THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.<\/p>\n YOUR PENSION INCOME COULD ALSO BE AFFECTED BY INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS. THE TAX IMPLICATIONS OF PENSION WITHDRAWALS WILL BE BASED ON YOUR INDIVIDUAL CIRCUMSTANCES, TAX LEGISLATION AND REGULATION, WHICH ARE SUBJECT TO CHANGE IN THE FUTURE.<\/p>\n","protected":false},"excerpt":{"rendered":" Getting your pension in shape to enjoy the kind of lifestyle you want in later life \u2018Will I be able to afford the retirement lifestyle I want?\u2019 is a question that many people ask but struggle to figure out. There are many ways to assess your likely income in retirement and work out how much… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1630"}],"collection":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=1630"}],"version-history":[{"count":0,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1630\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=1630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=1630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=1630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Know your number<\/h2>\n
Your annual allowance<\/h2>\n