In the previous article we started talking about planning your pension to ensure you have enough money to sustain your lifestyle throughout your retirement. Here are a couple more things to consider when organising your finances today.
Consider other sources of income.
It’s worth considering whether you have other sources of income that could let you take less from your plan.
For example, if you’re still earning money from work, or you’re going back into work soon, you might find you can afford to withdraw less from your plan. Or if you have money in an Individual Savings Account (ISA) or other savings accounts, you could think about using this to top up your retirement income. You won’t pay income tax on any interest you get from a cash ISA, so this could be particularly helpful while costs are high.
By taking less from your plan, more of your pension money stays invested. Generally, the longer your money is invested, the more opportunity there is for your pot to grow, which could mean you have more money in retirement.
Remember, a pension is an investment. Its value can go down as well as up and may be worth less than was paid in.
You can start claiming your State Pension when you reach State Pension age, which could take some pressure off your pension savings.
Review where you’re invested.
When you have a pension plan, you can normally choose where your money’s invested or have experts deal with this for you.
If someone else has been handling your investments, you could find your money’s been moved into lower-risk funds as you’ve approached your retirement date. If you’ve gone down the do-it-yourself route, you’ll normally be responsible for changing your own investments, if that’s what you want to do.
Either way, it’s important to check that you’re comfortable with your investments. You might want to change them, and you can often do this online.
You may want to take a bit less risk with them once you’ve reached – or as you approach – retirement. If you’re invested in funds that are more vulnerable to dips in the market and you then start making withdrawals, you’ll have less money invested to potentially recover losses. This could cause your money to run out sooner.
Ultimately, you’ll need to think carefully about what’s right for your own circumstances. If you’re unsure, it could be worth getting financial advice.
Our advisers have 20+ years of experience in financial planning and will ensure you enjoy a comfortable retirement in the future. To book a free consultation, get in touch.
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