Five tricks to stop your pension falling short: Experts warn HALF of workers over 60 don’t have enough money for retirement – but here’s how YOU can catch up fast
Baby Boomers will not have enough money to finance the lifestyle they want in retirement with the figures of almost half of workers over 60 years of age.
According to the mail on Sunday, 49 percent of the generation of 60 to 80 years of age are not expected to achieve pension targets.
The problem is particularly acute, especially for those who do not have a defined business pension that pays a guaranteed income in retirement. However, experts say that elderly workers should avoid burying their heads in the sand and still take action to improve their retirement savings while they are still winning. Here are the steps you can take if you are approaching a short retirement with pension.
How big is the problem?
The analysis of the investment giant Vanguard is based on the research of the 2,200 -working baby explosion, and defined benefit shows a seismic gap between those who have pensions and non -pensions.
In general, the final salary, which is called as pensions pensions, offers an income based on salary and service years.
It was once widespread, but it was almost completely gradually removed in the private sector. The majority of the workers are now entering their defined contribution (DC) plans.
DC pensions are based on an individual created a pension pot that needs to be converted into retirement income and the contributions of his companies and the return of investment.
69 percent of infant explosions with DB pensions are expected to achieve pension targets, but 28 percent of those with DC pots are less.
It is not expected that 49 percent of the generated generation between 60 and 80 years are still employed.
Vanguard Europe’s Senior Investment Strategy Analyst Georgina Yarwood says: ‘Half of Baby Boomers is not on the way to reach retirement targets considering the proximity to retirement.’
To save your retirement
Most people want to retire with a standard of living similar to what they have while working.
However, it is important to remember that retired people are exposed to lower invoices than workers, as well as other things, as well as to go and go, lunch and clothes.
The comparison figures from the Pension and Lifetime Savings Association brought the annual cost of a moderate retirement for an individual for £ 31,700 or £ 43,900 for a couple. These figures are subsequently tax and exclude housing costs. The individual or combined pension pot required for this is between £ 330,000 and £ 500,000.
If you expect your pension to be insufficient, it’s not too late to take action.
Benchmark figures from the Pension and Lifetime Savings Association put the annual cost of a moderate retirement for an individual in £ 31,700 or £ 43,900 for a couple.
Five step plan
1. Watch the old pension containers
To start, make sure you know where all your pension containers are and contact old employers to check the missing ones.
Calculate how valuable all your pensions are. Currently, there is £ 31.1 billion, sitting in unattended or non -active pension containers.
2. Review expenditures
Check your expenditure assumptions twice and ready to reduce expectations. Ed Monk, an assistant director of Fidelity International, says: ‘With the increase in retirement and the change of expectations, vital protectors understand that their savings can support their realistic way.’
Mrs. Yarwood adds: ‘Those who are not sure what a suitable expenditure target may be, can use online pension calculators to determine what a realistic goal is.’
3. Delay retirement
You can postpone retirement for several years or continue to work part -time. This will help you add to your pension container at the same time to reduce the amount you need to draw from it.
Furthermore, the state means that you can postpone your pension, which will increase by 5.8 percent for each year you delay the request. If you are healthy, this may mean thousands of pounds according to your retirement, but if you don’t live as long as expected, you lose.
4. Look elsewhere
Imagine other capital resources that you can draw to support your retirement income and saving containers that can be deposited for better return.
Andrew Tully from Nucleus, financial recommendation company, consider savings in other sources such as ‘Isa’, investments and bonds. And if they are deposited in cash, they can be invested in stocks or a balanced portfolio, as most of the Jesus is. ‘
Yarwood, beyond your savings, you can also choose to access your home equality. You can do this with the equity version that allows homeowners to receive a loan up to 60 percent of the value of their homes. Watch out, it comes with new debts with increasing interest. An alternative is to shrink.
5. Increase pension investment
Restoring your pension investments, especially if there is a few years before retirement, may allow your pot to grow significantly before accessing.
Mr. Tully says: ‘Imagine where your pension is deposited. If you are in a “default” fund, this will be very conservative or low risk. If people want to take more risks, there may be other options. ‘
Many pensions ‘lifestyle’, which means that your investments are at risk as you approach retirement to help correct volatility. This may drag refunds and may not be suitable for you.
Mr. Monk warns that if you want to invest in retirement, not to take too early. Your investment horizon and the potential of return can continue your retirement well.
- Go to thisismoney.co.uk/Penscalculator
