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7 Simple Tips to Maximize Your Retirement Fund

7 Simple Tips to Maximize Your Retirement Fund

Retirement is a time to enjoy the fruits of your labours—you’ll finally be able to do more of the things you enjoy, whether it’s taking up a new hobby or spending time with your grandchildren.

However, to make this a reality, you must make the best financial preparations possible. Pensions and retirement planning can be complicated, so make sure to learn the fundamentals as early as you can. 

Below are some of the best pension planning tips to ensure you’re on the right track.  

  • Lay Out Your Retirement Year Plans 

There are now many different methods to approach retirement. For instance, you could start by reducing your working hours or starting your own business for a steady income long after age 60.

  • Estimate Your Retirement Fund Goal 

Do you have an idea of how much money you’ll need in retirement? Be sure to budget for all types of expenses, such as house improvements, vacations, helping your children get on the property ladder, in addition to your planned lifestyle. Of course, many things can still change, so be ready to revisit your strategy in the next few years for achieving an ideal lifestyle. 

  • Save Up Your Retirement Funds

How much money have you set up for retirement? What can you expect from the government, as well? Don’t forget to factor in any other income streams you may have, such as ISAs or rental properties, when assessing your retirement funds. You can also opt for wealth management assistance if you need extra insight and strategies. 

  • Use Your Previous Year’s Pension Allowances

If you want to contribute more than £40,000 into your pension this tax year, you may be eligible to use unused allowance from the previous three years if you have earnings above that amount.

  • Make The Most of The Tax Assistance

It’s critical to take advantage of any tax breaks available when investing for your retirement. While you’re still employed, you can contribute to your pension up to the amount of your wages, up to a maximum of £40,000 every tax year. The taxman will add an extra £20 to every £80 you pay in. If you pay 40% tax, you can claim up to £20 back from HMRC directly.

Pension taxation is dependent on individual circumstances and is subject to change in the future.

  • Keep An Eye Out for Traps

Some older pensions have substantial guarantees built-in, which will be lost if you leave your current provider. Before making any decisions, get them reviewed by a wealth management advisor. 

  • Position Your Mindset in Taking Risks 

Understanding your risk tolerance will aid you in making sound financial decisions as you prepare for retirement. So, think about it: what is your risk tolerance? To put it another way, how much volatility in the value of your investments could you tolerate? Consider how much of a financial loss you can take.

Your attitude toward risk will influence how you withdraw funds from your pension account. You can do this in various ways, from purchasing an annuity to taking a lump sum and investing the rest of your pension.

Conclusion 

Retirement doesn’t mean you no longer need to manage your funds and savings. The fantastic thing about the above tips is that you can mix and match them to meet your income demands and risk tolerance. Getting the right combination can be tricky, so don’t be afraid to seek advice from an experienced wealth management expert. 

Wills and Probates can help in all aspects of retirement planning and wealth management. Do you need help or advice on the best options for you? Contact our experts today!