While we often enjoy our prime years without much thought of the future, it’s crucial to contemplate what retirement may entail eventually. Typically, retirement is expected once we reach our mid-60s – but the earlier we start saving for it, the better.
What happens when you lack the resources or financial expertise to make suitable plans for your retirement? Here are some practical tips to ensure you are prepared with enough funds to cover basic needs and more once you bid farewell to your work life:
Start Saving bit by bit every Month
Even if you’re 20 years away from the legal retirement age that entitles you to a state pension, it’s not too late to get started. By setting aside small amounts like £5 or £10 monthly, you’d be surprised at how much you can accumulate over the years.
Claim your rightful Entitlements
This may seem like common sense, but it can make a significant difference in making sure you’re not left penniless. State pensions, winter heating bills discounts, and even TV licenses are all accessible. Resources such as Age UK offer useful information on how to increase your income through benefits calculators.
Choose an appropriate Pension Product
Identifying the right pension product may appear challenging. However, by visiting websites like My Pension Expert, you can compare deals, use an annuity calculator, and understand the potential returns from your pension fund. Annuities and private pensions are ideal for receiving regular payments.
Securing a desirable Rate
It’s essential to negotiate a favorable rate when setting up your annuity contract to ensure value for money. Over the years, rates have declined due to increased life expectancy. Therefore, it’s crucial to get the most out of your investment. Consider any existing or future long-term health situations – they can afford you a higher rate to offset additional medical expenses.
Look out for dormant Accounts
Although often overlooked, checking for dormant accounts can be beneficial. These could be accounts you’ve forgotten about that hold some funds. If you locate such, consider transferring the money into your pension fund.
Start saving as early as possible
Delaying savings for retirement until you feel comfortable isn’t necessarily a wrong move, but early savings offer more opportunities to grow your pension fund. Even without any retirement savings, it’s never too late to start if you have some funds in a current account.
