Planning for retirement – will you have enough money?

Most of us work hard throughout our adult lives in the hope that when we retire we will be able to put our feet up and enjoy our later years. We might plan to do more travelling or just enjoy socialising more closer to home. But it’s a sad fact that many of us don’t actually know how much money we can expect to receive when we do come to retire. Far too many people just plod through the days working and just believing that our pensions will be enough to support us when we retire. But just working and paying the very minimum into a workplace pension may not actually be enough for you to support the kind of retirement you’re dreaming of.

Pension funds have improved over recent years with the compulsory contribution now required from our employers, but we all need to have an idea of how much money we need to be putting away if we want to be able to afford the lifestyle we dream of when we retire.

We can’t even rely on the high interest savings accounts that used to be commonplace. Those accounts are sadly a thing of the past. That doesn’t mean that you shouldn’t still save as much money as you can though, it actually means that in an ideal world you need to save more money than ever before.

Of course, once you reach pensionable age, you will become entitled to various schemes and deals that will help you to save money. For example, there are companies that offer deals for seniors mobile phones which can be a great way to cut back on your monthly expenses.

Working out how much money you need to save

Retirement income is a difficult thing to start to think about. How can you possibly know how much money you need to put away now and how much money you will need to have coming in when you do retire?

There are a few things you need to think about here:

• What age do you plan to retire?
• Will you still have rent/mortgage to pay?
• What are your plans when you retire – will you want to travel?

If you answered yes to any of these points then you’ll need a fairly decent pension income each month in order to be able to afford them.

You can use a retirement calculator such as this one from Pigly to help you work out whether you have enough money put aside for the retirement you’re hoping for.

You will need to put in a bit of thought to how you answer each question and make sure you do your research.

Once you’ve got all of your figures in, you can then see how your finances will look when you do retire. It might bring up some surprising results, but it’s always better to be prepared. If you’re not happy with the figures then it’s time to start putting more money away for retirement, the sooner you do this the better.

As well as thinking about all of the activities you plan to do and the lifestyle you’d like, you also need to make sure you have enough money put aside for emergencies. This might mean a boiler repair of replacing your car. It’s so important to have an emergency fund so that you don’t fall into the trap of paying for things by credit card and being stuck paying the minimum payments which will inevitably cost you far more in the longrun.

As if that’s not enough to think about when you’re planning your finances for retirement, you might also want to consider making sure you have enough money saved up in order to leave something for your children when you’ve gone. This could be in the form of actual cash, or it might be money you have tied up in property. No matter how simple you think your financial affairs are, it’s really important to get things right when it comes to leaving money for your loved ones. It’s always a good idea to look into a will writing service so that you can be sure your wishes will be carried out. That way, you can sit back and enjoy your retirement when the time comes.

What if you think you might have been mis-sold your pension?

Unfortunately, some people find that they receive less than they expected when they retire. This can sometimes be due to being mis-sold their pension. Victims of mis-sold pensions may be eligible to compensation, so it’s definitely worth pursuing.

However you plan to spend your retirement, you won’t want to spend it worrying about your finances. So, take some time now to figure things out, you’ll thank yourself for it in years to come.