More and more people are planning their retirement earlier. This can be an effective way of ensuring you have a healthy pot at the end of the road, but planning is not simply a case of saving cash into a pension and then drawing from it.
Ensure you have a healthy pot built up
Pension freedom reforms that were introduced four years ago mean that workers heading toward retirement can tailor how and when they use their pension pot after 55. The main changes from April 2015 included taking out the need to purchase an annuity to provide an income until death, and allowing the opportunity to get involved in “invest and-drawdown” schemes that were previously only geared toward the more affluent.
If you want to take control of your retirement planning with a low-cost DIY option, a SIPP might be the route for you. A low-cost self-invested personal pension is a DIY pension that allows you to choose your own investments and manage the pension pot. This means that you feel more in control by knowing where your money is. DIY retirement planning can be preferable because the tools are available for free on the internet and the results can often be realised much quicker.
However, if you have built up cash and you want to hand the job to someone else with expertise, you can put your money matters in the hands of professionals at Cheltenham accountants. A professional, friendly service is provided by accountants in Cheltenham for those seeking to organise their finances to make them more healthy for retirement.
Opportunity to mix and match
According to This Is Money, ISAs play an increasingly important role in helping people to reach income goals when they give up work. This is not an alternative to the pension, but it does help toward building a nest egg.
There is the opportunity to mix and match various options, or you can leave the whole pension pot intact. There is so much to consider when working out finances and making a decision on which option or combination will give you a steady income throughout your retirement.
Professional advice is often recommended as you will have to consider factors like the amount of cash in your pot, your life expectancy, and even the possibility that you may require care later in life.