Plan for a financially secured life | Personal Finance Views

Thursday, November 26, 2015

Plan for a financially secured life

An individual’s retirement is supposed to be a period in a person’s life where they can kick back and enjoy the things they might not have had a chance to do when they were in the midst of a busy career. However, it is important to remember that unless you plan accordingly in terms of finances, you might not be able to do much at all.

It sounds harsh, but those who don’t work out to manage their savings during their career, they will possibly find retirement a struggle. In these times before you call it a day on your working life, ensure that you are maximizing your pension potential, as they can be used as a tax-efficient way of making sure you’re all set for the latter stage of your life.

financially secured life

Further reductions in pension tax rates in America means that now is the perfect time to really take advantage of creating a solid plan for your pension scheme, which will help you live comfortably as possible after your career has come to it close.

Those who are in their early days

If you’re in your 20s it is important that any debts from university perhaps are being sorted out in preparation for when you really need to get saving; so clear those overdrafts and get a clear view of how much you’re repaying for uni fees.

Next up is looking to set up a healthy ISA (which might be a bit of a struggle in this day and age, but get the best you can). Into this ISA, put whatever it is that you can afford into it to ensure that you’ve started to save early, even if it’s just a little.

Getting a little older

As you enter your 30s, you might be looking into elements such as marriage and having your first (or second) baby and therefore need to reassess where you stand financially. Look at all your debts and compare them against your outgoings which will have expanded in the last few years of your career, so technically you should be able to start putting more away.

If you haven’t properly joined a pension scheme by your early 30s, you should certainly look into it and start filtering some of your savings into it.

Entering your 40s

This is a pivotal period of your life and if you’re not saving particularly decent amount of money, then you should certainly look to change that, especially seeing as though your earnings should be peaking.

Your ISA should really be looking pretty healthy at this stage and your earnings should be going towards both this and your pensions.

Mid-life non crisis (hopefully)

This is a pivotal period for you and your savings and a time that should see you maximizing your contributions to both your ISA and your pension. You should think about setting a provisional retirement date, even though it will still be a few years away.

The location of your pension should also be assessed and looked into whether it is in a safe cash investment or perhaps a risky stock market punt. Self-investing (Sipp) allows you to exercise greater control over the way your pension is invested.

Running up to that special day

When entering your 60s, you need to be discussing your future with relevant experts that will help ensure that you are all set for retirement and will be able to help you to choose how you will implement the money.

You can keep your pension pot if you feel it necessary and feed the money as you see fit, or you can hand it over to the right people who will send regular monthly payments.

After that, enjoy life.

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