How to Plan Retirement Income

It is wise to start planning for retirement now, so you can shield your assets from the cost of care and you can provide for your loved ones. Prestige Tax and Trust Services explain how to plan retirement income.

Golden income level

First, determine how much money you will need each year to live comfortably. This is dependent upon your existing lifestyle. As a baseline, look at figures compiled by the National Employment Savings Trust (NEST), a state-backed pension provider. NEST estimates that you will need a minimum of £15,000 per year, or £15,000 – £20,000 per annum to live comfortably and have disposable income.

Workplace pensions

Next, where will this money come from? Alongside any private pensions, unless you are self-employed you will benefit from money your employer has saved on your behalf in a workplace pension. If you work in the UK, earn a minimum of £10,000 per year and are between the age of 22 and state pension age, due to recent legislative changes your employer is now obligated to enrol you in one of these programmes. If you do not meet this criteria, you can enrol in a work place pension scheme of your volition.

State pensions

You will also be entitled to receive the state pension from the government, once you reach pension age. The basic state pension is £119.30 per person, although you may also be entitled to receive additional state pension. In contrast if you reached state pension age on or after 6th April 2016, you’ll be entitled to receive the new state pension of £155.65 per week. Apply for a State Pension Statement to determine how much this will contribute to your overall retirement fund.

Determine your pension

With this information, you can calculate your retirement income, In order to execute this task, utilise the Money Advice Service’s pension calculator. This service will illustrate what you can expect to earn from a pension, depending on how old you were when you started paying into one. It also shows you what would happen to the value of your pension pot, if you delay retirement for one, two or five years.

Prestige Tax and Trust Services

Once you have calculated your annual pension, you can plot how to fund retirement, without utilising your assets to bankroll the cost of care. It is wise to enlist expert help when dealing with cost of care matters. Prestige Tax and Trust Services has the legal acumen required to help you plan for retirement.

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How to Write a Residuary Clause in Your Will

To ensure your loved ones inherit your assets when you pass away, it is vital that you word your will properly. Prestige Tax and Trust Services explains how to write a residuary clause in your will.

Write a will

It is key that you learn how to write a will. By pursuing this strategy, you will be able to determine who will inherit your assets when you die. Otherwise, this issue will be dealt with by the British courts based on the rules of intestacy, so you will not be able to control who inherits your assets.

Dealing with estate

There are two ways to bequeath assets in your will. You can make specific gifts e.g. leaving your family home to your children. You can also bequeath the ‘residue’ of your estate –  everything left after gifts, inheritance tax, debts, legacies, administration fees etc. have been deducted, to someone.

Dying partially intestate

It is vital that you leave the residue of your estate to someone in your will, otherwise you will die partially intestate. This means that your gifts will be inherited by your loved ones, but the courts will decide what happens to the remainder of your estate, so your wishes will not be taken into account.

Stating your intentions

You can bequeath your entire estate to one person, which is known as a ‘residuary gift.’ You can also leave the remainder of your state, sans gifts, to more than one person. If you pursue this option, however, it is essential that you reveal, whether equal or otherwise, the share of your estate that each of the relevant beneficiaries should inherit.

Clause examples

If you want one person to inherit the residue, you would simply write “I give the residue of my estate to [applicable beneficiary].” If you wanted to divide the residue of your estate among multiple beneficiaries equally, you would add the other names, along with the phrase “in equal shares.”

But what if you wanted to divide the residue of your estate unequally? Let’s say that you want your mother to inherit two thirds of the residue and your brother to inherit the other third. In order to fulfil this aim, you should write in your will “I give the residue of my estate to my mother [applicable beneficiary] (two thirds share) and to my brother [applicable beneficiary] (one third share).

Prestige Tax and Trust Services

With a properly-worded will, you can ensure that your loved ones are financially protected when you pass away. In order to ensure that you write a strong will, you may want to enlist the aid of Prestige Tax and Trust Services. Our team has the legal acumen and experience needed to ensure you can deal with your estate appropriately once you die.

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