How to plan for retirement in Leeds
In a world where most people are concerned about factors outside of their control, such as growing living expenses, rising inflation, and interest rates that haven’t been seen in years, it makes sense that you might feel unprepared when it comes to matters like pensions and retirement planning.
When preparing for retirement, you have the opportunity to pursue your passions and decide on the type of life you wish to lead. There are a few crucial questions to keep in mind:
- How much do I want to have saved by the time I retire?
- What sort of retirement lifestyle do I want?
- What are the sources of my retirement income?
- How long do you think I’ll live after I retire?
The most crucial thing is to begin your retirement planning as soon as possible. The sooner you begin to invest and save, the longer your money will have to grow. This is particularly valid if you want to retire early.
When is the best age to retire?
In the UK, there is no longer a set “retirement age”; you can take your retirement anytime you like and people are free to work as long as they choose to.
At rockwealth, we usually focus on the three important ages below:
- 66 – Age to receive your State Pension (set to increase from 66 to 67 between 2026 and 2028)
- 55 or older – Age you can access your pension funds
- 60 – 65 – Age you can begin to receive your salary workplace pensions (if applicable)
When deciding when to retire, you should take these milestones into account. The “ideal age” for you to retire, however, will depend on a number of variables, including your job and lifestyle, expected lifespan and whether or not your savings can support an adequate monthly income for the rest of your life.
Knowing your State Pension age, or the age at which you will begin receiving a state-provided pension, is crucial. If you retire before then, you’ll want more funds throughout that period.
Locate pensions and work out your retirement income
Source: 3-million over 50s will leave planning retirement finances to final two-years
The days of retiring with one pension after working for a single firm your entire career are essentially over. Individuals, not their employers, are now responsible for managing their pension funds for their retirement.
See our four simple steps below to help you work out your retirement income:
Do you have enough income to cover your retirement plans?
Several variables, including how long you anticipate living in retirement and the kind of lifestyle you wish to maintain, will affect how much income you’ll need to retire.
Start by asking the most fundamental questions to yourself: Will my current income and assets be enough? Will my expenses exceed or fall short of the amount you expect to have in retirement?
A lack of retirement savings is one of the worst mistakes you can make. In your later years, you might find it difficult to make ends meet as a result, and you might even have to rely on others for financial assistance. You can never start saving too early, and the sooner you do so, the better off you’ll be.
If it turns out that you need additional income for retirement, talk to your financial planner in Leeds about expanding your retirement savings and perhaps even by topping up your pension.
The Pensions and Lifetime Savings Association’s information on Retirement Living Standards can also be used to help you visualise the type of retirement living you might have.
Would you like to discuss your retirement plans?
Now that you know the following:
– how much money you may require in retirement
– how much you may receive from your various pensions
– when you may start receiving an income and/or a lump sum
you might consider creating a retirement plan.
Expert Pension advice in Leeds | Pension and Retirement Planning in Leeds
Retirement FAQ’s
I’m nearly at retirement age, what should I consider?
First, it’s important to know when you’re eligible to start receiving your pension. In the UK, you can start receiving your state pension at age 66, but you may be able to start earlier depending on your circumstances.
Secondly, you must get in touch with HMRC to make sure your tax information is current and correct and let them know when you want to begin receiving your state pension.
Next, you should think about how you want to use your pension. Will you use it to supplement your income, or do you plan to use it as your primary source of income? Knowing this will help you determine how much of your pension you want to withdraw each month or year. It’s also important to consider how you want to save for retirement and what kind of investments you want to make. You may want to consider setting up a personal pension plan or investing in an ISA. Additionally, you should research different types of annuities and other investment options so that you can make an informed decision about the best way to save for your retirement.
Finally, you should make sure that you have a retirement plan in place so that you know how much money you’ll have when you retire and how long it will last. This will help ensure that your retirement is financially secure and that you won’t outlive your savings. This is also an ideal moment to amend your will in case of any unanticipated situations.
I’ve lost a pension pot. What Should I do?
Research from a recent Pension Policy Institute, calculated the total value of lost pension pots has grown to £26.6 billion in 2022
If you think you might have lost a pension pot from a previous job, you can use the government’s Pension Tracing Service.
What are my options for using my defined contribution pension in retirement?
- Keep your pension savings in place and use them afterwards.
- Utilise your pension fund to purchase a lifetime or fixed-term annuity, which is a guaranteed income for life. But even though the income is taxed, you have the option to withdraw up to 25% (or even more with some plans) of your pot as a single, tax-free lump amount at the beginning.
- Pension drawdown, often known as using your pension pool to create a flexible retirement income. You can withdraw the maximum amount (often up to 25% of the pot) tax-free in one lump sum and use the remaining funds to generate ongoing taxable income.
- Take several lump sums; typically, the first 25% of each withdrawal from your fund is tax-free. The remainder will be subject to income tax.
- Take all of your pension money at once; typically, the first 25% is tax-free and the remaining portion is taxable.
- Choose from any combination of the aforementioned possibilities, combining them in various portions of the same pot or in other pots.
Should I withdraw my pension in advance?
Early access to pension savings might not be the wisest course of action. The majority of people will live longer than they anticipate, therefore their retirement funds must be sufficient to meet their needs for the rest of their lives.
If you do decide to withdraw your pension early, you can combine several approaches to get the balance that best suits your needs. In this case, your adviser can be of great help. They can regularly assess your financial decisions to make sure they still support your retirement goals.
Contact rockwealth today – your local Leeds Retirement adviser.
IFA and Financial Planners in Leeds
rockwealth Leeds is an evidence-based and fee-only Independent Financial Adviser situated in the City of Leeds, West Yorkshire.About Us: Nestled in the bustling centre of Leeds, rockwealth is your dedicated local financial planning firm, offering a plethora of financial services. From tailored financial advice to comprehensive pension and retirement guidance, investment advice, and inheritance tax planning, we are here to facilitate your financial journey in Leeds and the broader West Yorkshire area.
Interested to work with us?: Begin your financial journey with us through an Initial Discovery Consultation, completely free of charge and without any obligation. You can visit us at our office, schedule a video call, or call us on: 0113 5266022.
Discover rockwealth Leeds at: rockwealth Leeds, One Park Row, Leeds, LS1 5HN.