How to save for your retirement

Are you interested in learning how to save for retirement? Not entirely sure what to save, or which avenues to take? The team at Milestone is always on hand to support you.

In these ever-changing times, planning for retirement can be both a daunting prospect and trickier than it was before the global pandemic. For those who were already contributing into salaried pension savings schemes or simply tucking away a few pounds each month, you may have already accumulated a nest egg. However, if this isn’t the case, there is certainly no need to panic.

There is no time like the present to consider your options. Here we take a look at the steps you can take to learn about your retirement potential and maybe even formalise some arrangements towards a more financially secure future.

 

How to save for retirement – where do I start?

Well, that very much depends on the position you are in now. Everyone’s circumstances are different. Your current income/expenditure may or may not include some savings for the future. If you have an idea about the age at which you wish to retire, that’s an excellent way to start your plan.

If your desired date for retirement is several years ahead, you naturally have more time in which to save and thereby more options available to you. You may be pleasantly surprised how the value of assets has increased and suddenly find you have a lump sum to invest and build savings from.

Giving yourself little time to plan and save is never a good idea. Therefore, look as far ahead as you can, even if it seems too far away to begin thinking about it.

 

Consider your pension(s)

The nationally recognised age for retirement when you will be entitled to draw an old-age pension from the state is currently 66 applicable for both men and women. This is only set to increase to 67 by the middle of the decade and to 68 between 2037 and 2039.

But what about private pension pots? Salaried employees are sometimes offered the option to join a company pension scheme, too. In the longer term, these can prove to be worthwhile. If you have fewer years left before retirement, you may wish to check what the likely return will be compared to saving by some other means. It could mean shaving a small amount off your income each month to help bolster your eventual retirement package.

For private pensions, the minimum age you can access these is currently 55, rising to 57 in for those retiring from 2028 onwards.

Do you know the value of your existing pensions and what you can do with them at retirement? Do you know what income you will need in retirement? Don’t be hasty when it comes to pensions, if you are over 55 and don’t actually need to access your pension then don’t. If you have large cash savings, use those first (down to a reasonable level) as cash is the most inefficient asset due to low interest rates.

By not withdrawing your pension on the date you become entitled to do so, you will benefit from potential additional compounded growth. This could lead to a higher tax-free lump sum or higher income in retirement when you need to access your pensions.

 

 

Investing for the future

Investments are wise, however, this is only the case if you really know what you are putting money into. Investing in stocks and shares can produce growth and income, over time, depending on performance – you, unfortunately, can’t control this. Of course, these values frequently change due to market movements  and it’s advisable to take advice from qualified professionals.

A professional financial planner will be able to help you to create a more suitable, diverse portfolio and manage risk. It is recommended to take advice from trustworthy financial planners, such as Milestone Financial Planners, who have a broad and specialised knowledge of investment funds.

 

Taking the next steps

Whether you are in the early stages of saving for retirement, or are considering retirement over the next few years and want to know your options we are here to help.

Financial advisors and pensions experts are qualified, knowledgeable, and have the experience that you need to better ensure that your hard-earned money is being put to good use.

If you are unsure about what to do for your retirement or have any questions about what you can do now to prepare for later, then contact Milestone Financial Planning. Our team of friendly and experienced financial advisors have been professionally supporting customers from all different kinds of backgrounds for many years.

We understand how hard you have worked for your money, and we will always treat your plan as if it were our own, with the utmost care and attention. Our job is to ensure that you are working with someone you trust and understand.

To contact us, simply call us on 01246 903053, or simply email us at enquiries@milestonefp.co.uk. Let us help you prepare for a bright and comfortable future today!