It’s never too late to think about your options when it comes to approaching retirement. Whether you’re ten years or ten days away from retiring, there are actions you can take to optimize your pension position.
Gone are the days of a guaranteed life-long pension from our employers.
These days, it’s a bit more complicated than that. You have several choices to make on how to use your defined pension pot.
Most people have built up a defined contribution pension fund over their working lives. A defined contribution means that the amount you’ve put in over the years is certain, but what you get out is not.
You now get to decide how you would like to manage your financial future for retirement. You can divide your pension savings between a lump sum when you finish working, an annuity (or guaranteed income for life), and a flexible retirement fund (known as an Approved Retirement Fund or ARF).
Investing your ARF Read more
How does income in retirement work?
Income in retirement will usually come from a handful of sources: the pension pot you’ve built up over your working life, your other savings and assets, and the State pension.
There are 3 key factors to consider when thinking about how you want to approach your retirement income;
- You may need to change your approach to money, you are now in charge of your monthly income and ensuring you have enough left to help you maintain your lifestyle over the years to come.
- Consider your investment strategy, most people would want to count on a regular income. You’ll want to live off of your pension pot for 30 years or more, so some element of growth is likely still required.
- What lifestyle do you want to have when you enter your well-deserved retirement? Most likely, your monthly costs like children and mortgages will start to reduce. It’s a great idea to readjust and re-set your budgets to accommodate these changes as you gear down for retirement.
You can experiment with the MoneyCube retirement planning calculator to get an idea of what will work best for you: Go to calculator
Your retirement approach doesn’t have to be set in one lump sum, annuity or ARF. You can mix and match your choices to come up with the option that suits you!
So, what are you waiting for? It’s time to get on board!
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Approaching retirement 10 years out – top things to consider View session
Approaching retirement 5 years out – top things to consider View session
Approaching retirement 1 year out – top things to consider View Session
Have more questions or are you ready to start today? Get in contact with our partners from Moneycube for an in-depth and personalised chat.