One in three older people leaves retirement planning up to two years before they retire or doesn’t prepare at all, although experts believe you should get your finances in order when you’re in your 50s.
More than half of people who have recently retired would also warn the next generation to plan more, save harder now, and think hard about how to access retirement pots, according to new research.
Covid-19 and the economic downturn make it more important than ever to plan ahead, according to the government’s Free Money and Pension Service, which surveyed 2,000 people ages 50-70 about their retirement.
Looking ahead: More than half of people who have recently retired would warn the next generation to plan more
MAPS suggests five key steps for getting started early, plus a final checklist of what to do before retirement in recent years.
This is Money has a guide to what you can do at the 55, 65, and 75 age milestones to make your retirement comfortable here, and see below how to manage your retirement if you fear it may fall short.
According to official statistics, there are over 16 million 50-70 year olds in the UK and three quarters of them have some form of retirement savings outside the state pension.
But more than one-third of people over 50 leave retirement funding planning late or don’t want to plan at all, and only 7 percent feel fully prepared, the MAPS survey found.
When asked about the Covid-19 pandemic, 36 percent of 50 to 70-year-olds said their finances had been compromised, and 18 percent had decided to delay tapping their retirement.
What do retirees advise younger generations to do?
MAPS surveyed more than 700 partially or fully retired people about what advice they would give people born between 1965 and 1980 about their finances.
1. Save more for your retirement (60 percent)
2. Start planning your retirement finances earlier (56 percent)
3. Take the time to decide how to access your piggy banks (45 percent)
4. Find out more about how to get the most out of your retirement (44 percent)
5. Seek advice on how best to organize your retirement finances (41 percent)
About 14 percent gain early access to retirement, usually to support their own day-to-day finances as well as to support family members and friends.
MAPS notes that by 2020, approximately 940,000 people, the highest number in nearly two decades, will reach the age of 55.
This is when you can first access your retirement savings without a criminal tax bill.
What early retirement planning should you do?
MAPs suggests taking the following five steps to prepare your finances.
1. Track your pension potions and check their value
Since the average person has 11 jobs in their lifetime, it is easy to lose track of any past pensions.
If you think you’ve lost a workplace pension, you should visit your former employer first, or you can contact the provider if you remember the name.
If you cannot find details of either, you can contact the government Pension tracking service.
After locating your pots, you can check your statements or ask your plan or supplier for an up-to-date estimate of how much you saved.
2. Think about your living costs when you retire
Budget your expected income and expenses as early as possible so that you can have more control over your situation.
The Money Advice Service has one free budget planner to help you map this out.
3. Think about the age of retirement and access to savings.
For some people this does not necessarily have to be at the same time.
Some people may have already chosen a retirement age with their provider, but if your circumstances have changed and you plan to retire earlier or later, you may want to rethink how your savings are managed to make sure your money is hard on you works.
It is useful to also check your retirement income with the Money advisory services pension calculator if you are going through changes.
Carolyn Jones: As more than a third of people over 50 have their finances affected by Covid-19 and we are facing a recession, people should not delay or skip planning their retirement finances
4. Consider whether your partner or family should be included in your plans.
If you want to provide your family members with your retirement savings, it can affect the choices you have when it comes to accessing your money.
5. Make a free appointment with the Pensioenwijzer.
Specialists, available to people 50 and older, will explain the pros and cons of the options for accessing your retirement savings, the tax implications, how to shop around to get the best deal, and how to scam your retirement savings. can prevent.
Phone appointments are available on 0800 138 3944 and the website is on here.
What should you do in the run-up to your retirement?
MAPS recommends that you do the following in the past two years before you retire.
1. Calculate your likely retirement income
– Track lost pensions
– See how much you can get from your defined contribution pension – check your annual overview or ask your providers for a new one to see how much savings you have built up.
– Request an AOW statement here.
– Find out which other savings and investments you can use for your retirement
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2. Prepare a budget to calculate your retirement costs
– Find out where your income comes from and how you spend it
Consider what changes you may need to make to live comfortably
3. Do not take any risks with the accrued pension savings
– Prevent pension swindlers by being on the lookout for any unsolicited contact about your pension
– Find out who you are doing business with and do not let yourself be rash decisions
4. Determine when you will retire
– Ask your pension provider when you said you wanted to retire and whether you still want to do so
– Think about how you want to get money out of your pension, if it is a defined contribution scheme. (Read a This is Money guide to your choices here.)
Carolyn Jones, head of retirement policy and strategy at Money and Pensions Service, says there is no set date when people should plan for retirement, even if your 50s are a perfect time.
But she notes, “The earlier you do it, the easier it is to bridge any gaps, and the more likely you are to feel prepared and comfortable when you retire.”
Regarding the current coronavirus crisis, she adds, “ As more than a third of people over 50 have had their finances from Covid-19 and we are now facing a recession, we urge people to plan their not postpone or skip pension finances. – whether you are considering retiring later or early.
“Your retirement is probably one of the most valuable assets you own, so it’s really important to start planning early to make sure you’re making the best choices based on your circumstances.”
Jones continues: People who have met with our Pension Wise specialists feel more confident, informed and prepared when it comes to how they access their retirement savings.
“ In 2019/20, more than half of appointment clients said getting counseling changed how they access their retirement, or how they planned to. ”
How to arrange your pension if you are afraid it will fall short
If you’re worried about your retirement and whether you’re getting tired of it, read a full 10-step guide here to fix it.
First, research your existing pensions to get started. Broadly speaking, you should ask schedules the following:
– The current fund value
– The current transfer value – because there may be a fine to move
– Whether the pension is in a final salary or defined contribution scheme
– If there are guarantees – for example, a guaranteed annuity rate – and if you would lose them if you moved the fund
– The pension projection on the retirement age.
You can use a retirement calculator to see if you have enough – find This is Money’s here.
You need to add the forecast numbers to what you expect to get in state pension, which is currently about £ 9,100 a year if you have a full state pension.
Receive an AOW forecast here.
If you’re tempted to merge your old pensions, here are some tips on how to make a decision.
If you’ve lost track of old pensions, the government’s free tracking service is here.
Be careful when searching online for the Pension Tracing Service as many companies with similar names will appear in the results.
These also offer to look for your retirement, but try to charge or beat you for other services, and can be fraudulent.
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