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.
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.
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.