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The Pension Series: How to make sure you have enough money to retire

The thought of retirement can either fill you with dread or with excitement. Some can’t wait to quit the rat race and enjoy a quieter life, while others can’t imagine not working in some way. Whichever category you fall into, having enough money to retire on is something on all our minds. In the third instalment in our Pension Series, we look at what you can do to make sure you do have enough. If you want a personalised assessment, please get contact our team of independent financial advisers. You’ll find us on www.plutuswealth.com and ready to help.

 

What is enough?

This is a very subjective and personal question. We all have different lifestyles, needs and things we enjoy doing, and our outgoings will reflect those. Generally speaking, there are three categories that cover retirees’ typical lifestyles:

 

Rule of thumb for pension income

Regardless of lifestyle preferences, most people mistakenly think that they need the same amount to live on as they do while they working. The truth is that you can live comfortably on less. You have fewer outgoings – no mortgage, or a much reduced one if you have downsized, and your commuting costs will have all but disappeared. You also won’t be making any further pension contributions.

The rule of thumb is that you will need about half to two-thirds of your after-tax working income in retirement. While this will depend on your individual circumstances, with lower living costs you won’t need as much as you think.

 

Pension income sources

Keep in mind that whatever stage you are at on your retirement path, there is still time to do something about it. Your potential pension income could come from any combination of these sources:

 

Calculating what you need

Planning for retirement is crucial. It will give you peace of mind that you will have enough money to live on and that you will not run out of cash. Start putting a pension plan in place so you know who will have enough money by:

 

It’s never too late to start saving

Whatever your age and whichever stage you’re at in your career, it’s not too late to start saving for a pension. If you are unsure where to begin, start by talking to one of our Plutus Wealth qualified independent financial advisers. You can call us on 020 7871 5200 or email us at info@plutuswealth.com and we’ll get you set up for retirement.

 

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