Saving in your 60s
Retirement these days looks different for each of us. However your retirement plans are shaping up, we’ve identified five small but important steps that can help you make the most of your pension.
Life used to consist of three key stages: education, work, retirement. This is often no longer the case, as we’ve transitioned into a more flexible, multi-stage lifestyle. This gives you more options when it comes to when and how you want to retire.
Start by knowing your savings goals
With so many options to choose from, it’s particularly important to know your retirement savings goals. Whether you want to use your pension to fund home improvements, travel or study, you need to make sure you know how much you’ll need to save, and what that means for your spending in retirement.
Use our retirement saving guidelines to get an idea of how much you’ll need to save each year to fund your lifestyle in retirement. From there, you’ll be able to set yourself a savings target to work towards.
Find out what you’ve got saved
During their working lives, the average person will work for about 11 employers. So, you may find you have a number of pensions with a few different providers. It’s important to know where these are and how much is saved in them, so you can get a good picture of your overall savings and investments.
If you’re unsure what you have, you can track down lost pensions with the Government’s Pension Tracing Service.
Check your retirement age
Check your retirement age in PlanViewer to make sure it reflects your current retirement goals and plans.
It’s important to keep this up to date as it drives the allocations of any automated investment strategies you may be invested in, such as a lifestyle strategy or a Target Date Fund. It will also ensure you receive relevant important information from Fidelity that is better suited to your current retirement plans and you’ll get more up to date projections about your retirement savings which can assist your planning.
Remember, the earlier you retire, the longer your savings will need to last. And the later you retire, the more time you spend earning a salary and potentially boosting your pension savings.
Add a little more today
A small increase to your contributions now, can still make a difference because, when it comes to saving, the longer you can contribute, the longer your savings have to grow. Time is a powerful tool and continuous contributions can grow to a sizeable sum, thanks to the benefits of compounding.
You can keep your money invested during retirement to really make the most of longer-term savings. Remember, the value of your pension savings can go down as well as up so you may get back less than you have saved.
Use your allowances
The maximum you can contribute to your pension in any given tax year is capped by your UK taxable earnings and the annual allowance. For most people, the standard annual allowance is £40,000 but for some, it could be as low as £4,000. You may also be able to ‘carry forward’ any unused allowances from the previous three tax years to make higher contributions, while still benefiting from Government tax relief.
Learn more about pension tax allowances and remember that tax treatment depends on individual circumstances and tax rules may change in the future.