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Forget the hard slogging 20s, the kids in your 30s and (*gulp) the big 40 and maybe even a cruise though the nifty 50s. That’s the past and now you are living life. Job is good and things are working out alright because you have been doing this a while now.
Does it feel like a long time? Have you thought about slowing down yet? State Pension age is 67 – check yours here.
So how many years have you done and how many more have you got left to go? How does that sound to you?
Most of the people I talk to are in Gen X. Lives lived, good and bad bits but they have realised they don’t want to work forever, so had a closer look at what their pension statement actually means and panicked.
I can tell you that you may have been paying into pensions for your entire working life and they may not be enough for you to retire comfortably. This is due to one major thing and that is, you have invested in the same thing that was good when you set those pensions up and markets have changed a lot over your working life.
Fundamentally, if you want to retire, you need to take out money from your pension every year or purchase a pension that can provide you an income that can sustain you.
The simple fact is, if you pay in 10% a year into a pension, then ignoring investment growth it will take you 10 years to save enough to pay yourself 1 year’s salary. Yes, you will probably not need your salary level in retirement, but it shows how important investment growth is, while you are growing your pension wealth. Without it, you will likely not be able to retire when you think you will.
I speak regularly to people who are then frantically throwing money into their pensions because they had dreams of sailing into the sunset when they hit 57 and they can’t afford to do so..
However, like I said before, you have the good job and things are alright because you have been doing this a while now. You can hopefully afford to do this if you need to but the longer you leave it, the more you will have to pay in, closer to that day and your fund will still come down to the performance of your pension funds.
If this is not an option and what is in your pension is what you must work with. Fear not and contact us here.
We are fully authorised independent Financial Planners and so making you wealthier and maximising your retirement fund is our job. For more information, contact us here.
A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
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