Life events that can influence your retirement income needs
When considering your income needs, it's a good idea to think about the types of events that could happen after you retire that may impact your budget. Thinking about these things early might help you when you're deciding the best way to take your pension savings.
Although you may have retired from full-time employment, perhaps you may wish to earn money from part-time work. Besides the State Pension, consider any other income sources you'll have when you finish working full-time and find out when they kick in.
Supporting your family
Perhaps you have children or grandchildren that you plan to help through further education. How will you provide this financial support once you've retired? Some people intend to help their children onto the property ladder; have you made a plan for how you'll afford this?
Leading a healthy lifestyle can help ensure you'll be fighting fit during your retirement. However ill health can strike at any time. And although you may not like to think about it, it's important to factor things like medical costs into your financial planning.
In the longer-term, you may also need to pay for residential care for yourself, your partner, or your parents.
Savings & property
The amount you have in savings may influence what you'll need from your pension. Is this enough to live on?
If you own a home, you may have decided that you'll sell your home and move somewhere that better suits your lifestyle needs. You'll also need to think about how you would pay for a new property and factor in any repair costs to a new or existing home.
How you choose to take your pension
- The way you choose to take your pension can impact things like your tax position or pension allowances.
- If you choose to move provider, you may lose any guarantees that you may have with your existing pension provider. You should also think about the impact of taking any tax-free cash, income or lump sums may have on any means-tested benefits you currently receive.
- There may be one-off or on-going charges to manage your money e.g. fees for financial advice or administrative costs for any of your financial products.
The effects of inflation
The effects of inflation may reduce the buying power of your savings and investments in the future, so think about how you'll maintain your lifestyle if your money doesn't stretch as far.