Can your pension sustain your retirement?

Our Financial Adviser Robert Sherlock answers your top questions

With many people falling short of having enough saved for retirement, it’s worth thinking about how long your pension can sustain your lifestyle. With recent news about rising inflation increasing the cost of living, along with people living longer, it’s more important now than ever to take control of your financial independence.

How much do I need in my pension pot?

Start with what you’d like to be taking out of your pension pot rather than what you need to pay in!

It’s important to understand what your requirements are, what your regular income expectations may be and or what lump sums you might want to take from your pension. When working this out, useful questions to consider include… what amount of income will make you feel comfortable when you retire? What are your plans when you retire, in terms of family commitments, part time work, hobbies or holidays? Some people will want to draw lump sums out and go on world cruises. Others will be happy with just enough income to pay the bills.

We aim to understand you, your family and your aspirations. By building a good solid and trusting relationship with you we are then able to calculate how much money you need in your pension pot, and what the monthly payments and contributions should be to achieve your retirement lifestyle and goals. We can help you model what retirement will look like and how sustainable your goals are.

How does pension drawdown work?

Flexi-access drawdown allows you to have the benefit of complete flexibility when it comes to taking money from your pension, while allowing the pot to remain invested, and potentially benefiting from further growth.

This type of drawdown allows you to choose how much and when you take income from your pension pot, provided you are 55 years old. You can increase or decrease the amount of income you take to suit your plans and situation.

Pension drawdown can have various uses for retirement planning, such as topping up income to support part retirement, taking larger lump sums for specific goals or life events, or even not touching the pot for a few years.

This flexibility makes drawdown an effective option for a lot of people.

Where should I start?

Start by creating a plan! The earlier you start to plan how you want your retirement to look the more likely you are to be able to achieve your goals. However, for all of the benefits of planning early, it’s also never too late!

Doing nothing and keeping your fingers crossed in the hope that you will have enough is not a sensible approach. Knowing what is achievable with what you have in your pension pot puts you in an informed position. This allows a more sustainable and practical approach for how you spend the money available. It can also reduce your concerns about running out of money.

My initial tip on getting started, would be to research and keep track of any pensions you have at the moment and consider consolidating them. This is great step in the right direction of making your retirement as financially worry-free as possible.

Our financial advisers can help you review your pensions and investments and advise on how to make the most of your savings.

Please contact one of the team on 01228 598821 or email us on info@stansherlock.com to discuss your individual requirements and start planning now.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Approved by the Openwork Partnership on 25/09/2023