Finance In Your Fifties (Part Three)

We’re concluding our series looking at finances in your fifties.

So far in the series, we have looked at your home and ways you can potentially reduce your outgoings and increase your income. Now, in part three, we’re going to look at planning for life after work.

With your fifties here, you are probably starting to think about what you would want your retirement to be like.

You don’t have to rush anything. The changes in the rules on retirement mean that you can simply continue working if you wish. If you enjoy what you do, you can simply carry on doing it – cutting down your hours if you wish.

Alternatively, you could retire at just 55, and live a life of leisure – if you have enough in your pension pot.

But whatever you choose, you will need to make the right arrangements now, and you may need to act quickly if you are to enjoy the kind of retirement you are currently only dreaming about.

Start tracking your pension pot and its potential, so that you can take steps to find out what’s available to you and maximise it when you can.

What sort of income will you have?

You will probably be entitled to the new state pension, when you reach state retirement age. The exact amount you’ll receive will depend on your National Insurance record, but you should keep these figures in mind when planning for your retirement – it’s a modest amount and certainly not enough to live on very comfortably, so you’ll need to make further provisions.

Find out how much of your salary is being put into your workplace pension both by you and your employer. Look at your personal pension to identify how much of an income you can reasonably expect when you retire.

Does your employer offer a workplace pension? If so, you’d be wise to take advantage of it. Consider a private pension too and save what you can into that. Recent pension reform has created a new ‘pension freedom’ never seen before in the UK, allowing retirees much more flexibility with their pension pots, so maximise it as much as you can.

Are you self-employed? The Federation of Small Businesses says fewer than a third of the self-employed are saving into a private pension. Over 15% say they do not have retirement savings of any kind. You may be tempted to invest everything into growing your business and ignore your pension but planning for retirement should be a priority from day one.

If you don’t have as much as you would wish for the pension you want, don’t despair. Your money doesn’t need to be under a ‘pension’ label for you to use it as a pension. Consider other sources of savings you might have, such as bonds, shares and ISAs. Properly used, these assets can put you closer to achieving your retirement goals.

Making the most of what you have

At Continuum we can help you build up your pension pot, by finding you the schemes that could offer the kind of returns you want. But that is only the beginning. We can help you look at ways to use your pension savings which could make them work harder for you – so even if they are lower than your ideal, they could still provide the kind of income you need. For example, instead of an annuity, you might consider options such as drawdown, which will allow you to withdraw the income you need from your pension pot while leaving it invested, to allow it to have the potential to continue to grow.

Get some advice

If our series has shown you anything, it’s that you have lots of options and some important decisions to make now in your fifties. Some are simple, like making a will. Others are more complicated like deciding what investments might give you the best return, paying your mortgage off early or saving more into your pension.

Now is the time to put your wealth to work on your behalf. You don’t need to get someone to completely take over what you do, but a Continuum professional can help with tax issues and investment advice to aim to get you the most from what you have accumulated so far – and help you accumulate a good deal more, if you need it.

Whatever your current situation, we can review your situation to develop a lifestyle plan to help meet the outcomes you want from life after work and make the most of life in your fifties – and beyond.

Lifestyle financial planning means having a financial expert to call on to help you make the most of your money and your life.

Get in touch today to find out more.

Please call us on 0345 643 0770, email us at [email protected] or click on the ‘Contact Us’ link below.

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The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable retirement strategy, you should seek independent financial advice before embarking on any course of action.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

Your pension income could also be affected by interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, all of which are subject to change in the future.

Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.

Your home may be repossessed if you do not keep up repayments on your mortgage

The Financial Conduct Authority does not regulate will writing or tax advice.