Planning And Funding Your Retirement

Simply put when it comes to thinking about funding your retirement then the earlier you go about doing it the better. Whilst the majority of people with a mortgage will have paid it off before they retire, the facts are that everything is going to keep going up in price, so whilst you may have no mortgage and that’s a good thing to have out of the way, you are still going to need to plan for electric, gas and food – None of which are likely to get any cheaper.

The life expectancy for men is now 86, and 89 for women, which means you should hopefully have a lot of years in retirement to look forwards to, but accordingly you need to plan ahead if you are not going to struggle.

With nearly all companies now closing their final salary schemes this means that your pension options are not as good as they once were.

It is very easy not to think about a pension when you are young and just live for today, but it is paying into a fund at an early age that brings the most long term benefits. Its tax efficient as well, so if you have extra money left over each month then you can save money on tax by putting more into a private fund.

However it is also all too easy to pay into a fund that is wrong for you or that may not prove suitable in the future. Simply put there is a minefield of advice to read through to make sure you get things right, and this is an area that you would be well advised to take professional advice on or get investments wrong.

This is because there are a number of things you may want to consider when you actually come to retire, such as do you want to be able to take a lump sum out of the fund in cash? You may find yourself wanting to do this if you find yourself still having a mortgage to pay off as an example. The law now allows you to do this from the age of 55 and the money you can withdraw is tax free.

Or you could choose the option to take up to 25% of your pension pot early to help with life’s expenses or maybe choose an alternative financial investment to boost your eventual retirement fund.

Whatever you choose to do it is best to look at your options with the help of a financial advisor before making any key investment decisions.

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