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Ensure your pension is working for you. Follow these five pension boosting strategies.
Everybody might have different aspirations for retirement, but there is one thing we all share regarding the money we have for when we stop working. We all want to have as much money in our pension pot as possible. The more money you can put into your retirement fund, the more comfortable you will ultimately be during your time in years.
The good news is there are things you can do to boost your retirement funds. Here are five pension boosting strategies to make sure your schemes are working for you fully.
Start saving for your retirement immediately.
Although it may seem a long way off, your retirement date is getting closer every day. Therefore, you need to commence saving for your post working years immediately. Doing so will give you the maximum time to build your pension on the light to grow to the full.
Top up your pension payments.
Top up payments into your pension do not have to be massive to make a difference. Even small additional amounts every month will add up, making a considerable difference over your pension’s lifetime. That is because of two things. Firstly, your pension benefits from tax relief, so the money you would pay to the government and tax on your contributions instead goes into your pension pot. Secondly, any small payments you make will grow significantly over the years from compound interest.
Don’t opt out of your workplace pension.
Despite having the option to leave your workplace pension, you should not do so. Your employer contributes the equivalent of 3% of your gross salary into your pension pot each month. These contributions are effectively free money, as you would not typically get this were you not enrolled in the workplace pension scheme.
Monitor your pension’s performance.
Making regular payments into a pension scheme is an excellent start, but you also need to monitor your pension’s performance. High fees or underperformance could result in your pension funds deteriorating. Therefore you should monitor your pension by conducting regular reviews to check performance levels and charges. Then take appropriate remedial action to correct any shortfalls.
Extend the lifetime of your pension.
By extending the time you contribute to your pension, you’re giving it additional time to boost your retirement funds. You will still receive tax relief on your pension contributions during any period you extend. Additionally, your pension will have extra time to benefit from compound interest growth.
When can you retire?
Although there is no compulsory age for a tournament, various factors will influence your decision. Here are three factors affecting when you can retire:
- Extension to working lives. Compared to 10 years ago, people are working considerably longer. They’re now more than a quarter of all 65-69-year-old men still working compared to only 15% ten years ago. In the same timescale, the number of working women aged 60 to 64 has almost doubled.
- Rising state pension qualification age. The age at which you qualify to receive the state pension (currently 65) has increased and is likely to increase further in the future. Currently, the full state pension provides you with an income of £179.60 per week. This amount is unlikely to be sufficient to sustain your retirement plans. Therefore, you should act quickly to put other plans in place for your retirement income.
- Pension flexibility. New regulations introduced in 2015 regarding pension freedoms mean that you have much more flexibility to access your pension funds. In most cases., You’ll be able to access your funds from age 55. However, before doing so, it may be prudent to seek advice from a regulated financial advisor.
Conclusion
Boosting your retirement funds is no guarantee of happiness. However, it certainly stands you in the good stead of having a comfortable retirement. Hopefully, these five pension boosting strategies will help you maximise your retirement fund, enabling you to have the retirement lifestyle you desire.
If you are considering your pension, consider using a regulated pensions specialist like Portafina.