Retiring

Most people will experience a significant fall in their income once they retire, so it's wise to give some thought to your retirement plans well in advance.The golden rule of retirement planning is to join the company pension plan and start saving early.

Planning for your retirement relies on you having a realistic expectation of how much money you'll need to live on and how much you're likely to receive from your pensions, savings and investments.

It helps if you can do a budget of your likely spend when you retire. Everyone needs to have enough money to cover the basics (clothes, food, heat, light, water etc) but you'll also need money for the extras like car tax, insurance & MOT, hobbies, birthdays, anniversaries, Christmas, holidays, meals out etc. The good news is that you won't have to pay any National Insurance contributions.

You then need to work out how much you'll get from your pension and other savings. Find out how much State Pension you're likely to receive and also ask your pension provider for a retirement forecast.

As you get older you might want to change your working pattern to part-time long before you actually stop working altogether. Or you might want to leave DMGT and get another job elsewhere. Or you might decide to take your pension, and continue working for the company. You'll need to take all possible scenarios into account when making your plans.

 

Top tips

  • If you don't join the company pension plan you will miss out on your employer's contribution. This is like turning down free money!
  • Plans change. You may only work for the company for a few years, but this can easily turn into three, four, five years or beyond. You might look back in the future and regret not joining the company pension plan earlier.
  • If you need extra income in retirement you could consider having a lodger under the rent a room scheme.
  • Check if your company runs any pre-retirement courses.

 

 

  • You don't have to retire from your job to receive your State Pension. If you are working, claiming it may put you into a higher tax bracket so this might be a good reason to delay taking it. On the other hand, you might want to draw your State Pension regularly and invest it elsewhere. If you take up your State Pension later you'll earn either extra pension or one-off taxable cash.
  • If you are going to retire early check to see if you have paid enough National Insurance to receive your full State Pension.

 

 

 

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