In order to plan effectively, you need to understand your likely financial needs. This is not pounds and pence, but a broad brush idea of how much you'd like to travel, whether you'll still have any dependents and whether you will keep some element of paid work.
Life will always get in the way. No-one expects to bail their children out of jail or to find their house was built on a sink-hole. However, if you think about the type of future you'd like it makes it easier to point in the right direction of travel.
The temptation is to move into lower risk assets as you get older. However, your pension pot is never going to last you into your eighties if it's all in cash and low-risk government bonds. It's not going to provide you with much of an income either. You need to keep the right level of risk assets in your portfolio to keep your pot growing over this crucial period.
Life has changed since people retired at 65 with a gold watch having put in forty years of loyal service. The modern career is eclectic and may comprise periods of employment, self-employment, entrepreneurship and consultancy. This can play havoc with your pension planning and may leave you with pensions all over the place.
Your first mission should be to collect together all the pensions you know about. The Government's pension finder service is useful. You should then contact all the companies involved to get a pensions statement. Add them together and use a pensions calculator to see the level of pension that might buy you. Consider consolidating your pensions onto one platform if they're proving really unwieldy.
This is the last chance to make a meaningful difference to your retirement. If you have any windfalls - from bonuses, inheritance or that old vase in the attic - direct it towards your pension. These are also likely to be your peak earnings years, so you should have more spare cash to put towards your retirement. Remember, any cash directed to your pension will attract tax relief at 20%, 40% or 45% depending on your salary.
Pensions operate separately from your will. That means they won't necessarily go to your spouse. That may be fine with you, depending on your relationship with your spouse, but it is worth checking who else it might go to before you cut them out - your ex-spouse might be even worse. The beneficiary for pensions is determined by a 'statement of wishes'. You probably filled it in when you first took out the pension. Either way, it's easy to find out and easy to amend.
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Get to grips with the Lifetime Allowance for pension savings with this simple video guide from AJ Bell Youinvest.
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