Living the dream, requires planning
We all dream of the time when our working life is behind us, a happy retirement, playing golf, holidaying, looking after grand children but planning for this time in your life is essential. Without careful consideration, this dream lifestyle could be a long way off realisation.
It is believed that potentially only 6% of the currently population are prepared for the perfect retirement. This is a worrying fact but a much higher percentage of people are not confident about their pension despite the new flexibilities
The pension freedoms announcement by the Chancellor in this year’s Budget, gives over-55’s flexibility in how they manage their pension savings. Under the new rules, set to come into play from April 2015, people retiring will no longer be required to buy an annuity, the product that turns pensions into a guaranteed income for life. Instead, you will have the freedom to take your pension pot entirely in cold hard cash.
Preparing for your pension cannot happen to soon, take a look at a few key points:.
Is planning in your 20’s and 30’s required?
General ‘living’ tends to be the focus for this age group, buying cars, a house, having children, paying off debts, etc but long term investments must not be ignored.
A little can turn into a lot if managed correctly, considering putting away a small affordable amount each month could be hugely beneficial, whether it’s a pension plan or individual savings accounts (ISA).
Flexibility will be the main priority in your 20’s and 30’s, long-term savings may initially be focused more on an ISA than a pension, but you must be disciplined about not frittering your ISA savings away.
IN YOUR 40’S AND 50’S
In the current climate, many of the challenges facing the 20’s to 30’s age bracket maybe also relevant in the 40’s and 50’s but in many cases when people reach their 40’s and 50’s they are likely to have higher earnings, and potentially higher tax savings on their pension contributions.
While there may be short-term priorities that could be expensive, such as high mortgage costs or the additional expense of supporting children through school or university, your focus should be predominantly on saving for retirement.
Throughout your working life, money continues to be a challenging factor in ‘life enjoyment’ but having the foresight to look to the future and make key decisions on how you spend your retirement years should always be in the forefront of your considerations.