Retirement Planning Book

A long life needs a strong retirement plan

Reaching the big 50 can be a financial wake-up call and can be considered as a crucial time when saving for your retirement.

Are you on track to retire when you want to? Do you have enough in your pension pot to retire comfortably? A comfortable lifestyle means different things to different people. If you’re in your 50s, it’s important to make retirement planning a priority if you haven’t done so already. At this age, retirement is no longer a distant concept, and time is short if your plans aren’t on track.

Will you have enough money for retirement?

One of the advantages you have in your 50s is that you are no longer relying on very long-term projections to determine if you have enough for retirement. The decision to retire will also depend on how financially independent you are, how healthy you are and even perhaps whether you have hobbies or goals you’ll want to pursue.

Now is the time to think about your retirement income goals and the steps that you need to take to achieve your goals. One of the most important things to do in your 50s is to work out how much you’ll need to retire comfortably.

There are many variables to consider, including the age that you plan to retire, your life expectancy, your income requirements in retirement, your expected investment returns, inflation, tax rates and whether you qualify for the State Pension.

Given the number of variables, this part of the retirement planning process is not always straightforward and getting advice is strongly advised.

Do you know the answer to these questions?

  1. When do I want to retire?
  2. How much income do I want in retirement?
  3. Do I have previous personal or company pension plans that need reviewing?
  4. Can I work part-time and take some of my pension?
  5. How much will my State Pension be?
  6. Where is my pension money invested, and is it growing?
  7. Can I retire early?

Providing you with more clarity

Nowadays, it’s common for many people to have accumulated an array of different pension agreements throughout their working life. By the time you have been working for a decade or two, you may have accumulated multiple pension plans on your career journey.

If appropriate, it may be worth considering a pension consolidation at this stage of your retirement planning process. This could provide you with more clarity in relation to your overall pension savings and make it easier to plan for your retirement. You could also benefit from lower costs.

But not all pension types can or should be transferred. It's important that you know and compare the features and benefits of the different pension agreements you are thinking of transferring. It is a complex decision to work out whether you would be better or worse off combining your pensions.

Not a lot of people know this….

There is a limit to how much tax relief you are entitled to. It is currently applicable to contributions up to £40,000 or 100% of your earnings – whichever is lower in a tax year. Another aspect to this is the three-year carry-forward rule. This rule can allow you to carry the last three tax years' annual allowance into the current tax year.

This is a useful tool for people who were unable to use up their annual allowances in the past but have the ability to do so for the current tax year. You must use this year's allowance before using the carry forward rule.

Review your retirement planning on a regular basis

Finally, in your 50s, it’s important to review your retirement planning on a regular basis. As with any other aspect of your personal finances, it’s essential to conduct regular reviews of your pension arrangements to ensure that they fit best with your current situation.

A regular review will ensure healthy progression towards retirement by checking that you are firmly on track with your retirement goals. This is the time to adjust your plan to fit any evolving needs and desires for your post-retirement years. We all change as people over time, and our pension planning needs to reflect our most current reality.

Retirement planning is a continual process, and the more often you review your progress, the more prepared you’ll be for retirement and the more in control you’ll feel. At a minimum, aim to review your retirement planning at least once annually to ensure that you’re on track to achieving your retirement goals.

“We’re with you” every step of the way and whatever stage you’re at, we’ll give you a clear idea of how much you’ll need to afford the lifestyle you want after you retire.

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales, number 7208672. The registered office is 15 Victoria Place, Carlisle, CA1 1EW. Armstrong Watson Financial Planning & Wealth Management is a trading style of Armstrong Watson Financial Planning Limited.

If you'd like to discuss your retirement planning requirements, please contact one of our financial planning team near you on 0808 144 5575 or email help@armstrongwatson.co.uk. Visit our website for more information on our financial planning and wealth management services we odder.

Visit Website

If you like this article and would like to subscribe to INSPIRED, our FREE monthly newsletter, then please click SUBSCRIBE.

Subscribe