Retirement planning is vital for ensuring that you can meet your goals for retirement, but it can be fairly easy to put off and worry about later. However, chances are that you don’t want to work forever and you may already have big ideas for how you want to spend your retirement.
The earlier in life you start planning the more likely you are to achieve the level of income you want and need in retirement. Failing to do so may result in you having to adjust your spending habits and accept that you may not be able to maintain your current living standards.
You may think the State will provide for you in retirement, however, most people would find it difficult to live on the State pension alone. The introduction of auto enrolment and workplace pension legislation, may have encouraged you to save more for your retirement, however, you should consider increasing the provisions you are making and ensure that the amount you are setting aside is aligned to your future needs.
Investing in personal or company pensions is an extremely tax-efficient way of saving for your retirement. There a several reasons for doing this, such as:
- Personal contributions receive basic rate tax relief at source and the funds grow free of tax.
- Higher and Additional rate taxpayers can claim further tax relief at their marginal rate.
- Company pension contributions for business owners and/or employees reduce corporation tax on profits and saves on National Insurance Contributions.
As you approach retirement, it is important to consider what provision you have in place, whether that be from pension funds built up through current and past employment or your own personal pensions.
Knowing exactly what you have and what your pensions can provide helps you understand your position and how it can be improved if needed.
Some important questions to consider are:
What types of pensions do I have?
These could be defined benefit/final salary pensions or money purchase/defined contribution arrangements. Each has important factors to consider and could offer you different options.
When do you want to retire?
Are you planning on retiring early or will you work on until your state retirement age?
How much do you need when you stop working?
We can prepare a detailed cash flow to illustrate what you may get at your chosen retirement date and how you can make up any shortfall that is identified.
On death what happens to my pensions?
It is crucial to understand how pensions are treated on death and that you understand how your family will benefit so that can help ensure their financial security.
How do I draw on my pensions when I decide to stop work and when can I access them?
The options available when accessing your pensions will vary. We can help you understand the options available and recommend the most appropriate method of taking benefits whether that be via an annuity (fixed guaranteed income), drawdown pension (variable income) or other income options.
The right team for the job
“I have had the pleasure of working with Henderson Loggie Financial Planning for the last 6 years. My initial enquiry was with respect to planning my retirement; my plans changed several times but Henderson Loggie Financial Planning handled it seamlessly making sure I had all the information I required to make the right decisions at the right time.
It is always a pleasure to talk to my adviser and, most importantly, I trust their judgment. I am always impressed with the professionalism of the wider Henderson Loggie Financial Planning team.”Ms C MacInnes