Future Planning

You're 20-something - who cares about retirement, right?

Well, with life-expectancies increasing, the cost of buying a home, and economic uncertainies, it's never too early to think about your financial future and how to help make the most of it.

• Just like a bank account, the more you put in earlier, the more you should get at the end
• Paying more now should mean that you don't need to pay in more later
• Contributions are tax-efficient (even more so with Salary Sacrifice)
  
• Maximising your contributions also increases the contribution from the Company
• Pensions are a long-term investment, and should be viewed as such

You've been working for a while now (and hopefully paying into your pension). For most people, these are the years where you invest in growth assets to grow your fund.

• Are you paying Additional Voluntary Contributions (AVCs)?
• If you've changed jobs, remember that most schemes allow you to transfer old pensions in.
• You might have other priorities, but do your best to keep your pension going where you can

It might feel like you've been working forever by now, but most people will have another 20 years to go.  Time for another pension check up:

• Check your state pension forecast to see if you're on track for state benefits
  
• Assess the size of your DC Account and find out how the money is invested
• Is your pension invested in funds that you understand and meet your expectations?
• Make sure you update old pension schemes with new contact details
• Think about increasing contributions (make the most of pay rises and bonuses)

Retirement now starts to seem real, but you might not be ready yet. Definitely time for another review:

• Where are your contributions invested?
• Is your DC Account invested in a LifePlan?
• If so, is your Target Retirement Date (TRD) still appropriate?
• What retirement product are planning to use (annuity, drawdown, or cash)?
• Are you still on track or do you need to contribute more?

You might be retired now, working, or a bit of both.  Either way, you might want to think about:

• Have you thought about off any debts that you have before you retire (like your mortgage)?
• Would flexible retirement help you adjust?
• Have you got enough income to retire (and how long will it last)?
  
• Will you be entitled to anything from the State (State Pension, tax credits, etc)?

There are different types of pensions out there, you might have:

• A Defined Benefit (DB) pension, where you receive a set amount based on your service with an employer and your salary
• A Defined Contribution (DC) pension, where your contributions are invested and what you receive will depend on how your investments grow over time
• Or a mixture of both (known as hybrid)

It's really important to know what types of pension you have to help you plan properly.

The State Pension Age (SPA) is rising, so people may need to wait longer to receive it.  However, the full State Pension is likely to exceed £10,000 per year, so can provide a boost to your retirement income.

It might be worth requesting a State Pension forecast to help you understand what you're likely to receive and when.

When people stop working their retirement income is usually less than the salary they received when working.

Knowing what your outgoings are going to look like will help you plan how much money you're going to need.

As you get nearer to retirement, you might want to transition from full-time work to retirement gradually.  You can take Flexible Retirement with BASF any time from age of 55 (rising to 57 in 2028).

Depending on your benefits, taking them earlier could reduce their value or mean that they don't last as long as you need them to.

Whether you're taking your first steps or last steps on your financial journey, it's not uncommon to need a bit of help.

Financial planning decisions are complex and you may benefit from speaking with a financial adviser.

If you don't have an adviser, you can find one in your local area by visiting www.unbiased.co.uk.