6 Ways to Financially Cope with Retirement

Retirement can be a large burden on your finances, especially if it is not something that you have previously considered. However, even if retirement is something that you want to ignore, you should consider what you will do to cope with retirement without it becoming a strain on your finances.

1. Contribute to Your Savings

This is the best way to cope with retirement financially. Spreading the cost of retirement over a number of years will ensure that you can contribute towards your pension schemes while also being able to maintain enough money to live well during your working life. Not only this, but the addition of compound interest is a large benefit that can ensure that you get the most from your money and encourage you to start saving early, with your 20s being the best time to start saving.

2. Auto-Enroll onto Work Pension Schemes

Every workplace should offer you a work pension scheme unless you are freelance or self-employed. This work pension scheme ensures that your workplace supports you during your retirement as payback for your time spent in their service. No matter how long you eventually work for them, contributing to your work pension scheme can ensure that both you and your employer put money away to help you in the future, with employers spending 0.8% of their gross takings on pension schemes.

3. Track Your Pension Growth

Time is of the essence when it comes to pensions, and leaving them to grow by themselves can be a spell for disaster if not handled correctly. By tracking your pension growth on an annual basis, you will be able to see where your investments and contributions are going and whether you will be able to reach the targets that you have in mind – let alone whether the risk factors that you previously agreed to still aligns with your way of life.

4. Research State Pensions

At £115 a week, state pensions can be a measly sum for those that have worked for high wages throughout their working life, especially when you factor in outstanding payments such as rent and bills. However, by making voluntary contributions or by ensuring that you pay National Insurance for as long as possible, you will be able to increase your state pension and ensure that you are covered in the future.

5. Consider Releasing Equity

You should also consider releasing equity. This is an extremely popular way to support yourself in retirement, but it can come with many negatives such as a lowered inheritance, and so you should research the pros and cons before deciding on this as a final solution.

6. Shop Around for an Annuity 

Many buyers rush into buying an annuity when they need it. However, you should look past the deal offered you by your insurance provider and look to the open market, where deals can often have a 60% difference in income if you choose unwisely.

The facts stated here are for general advice only and can not be replaced by the expertise of a financial advisor, which you can find at Portafina. Additionally, this is general information and may have changed by the time you read this article. However, Portafina also has a range of up-to-date social media where you can find the latest information, at @portafina_uk, Portafina’s Facebook, LinkedIn and YouTube.

Disclaimer: Please be aware that the information above is not financial advice. For any financial decisions you need to make, please talk to a qualified financial advisor beforehand.

Disclaimer: Please be aware that the information above is not financial advice. For any financial decisions you need to make, please talk to a qualified financial advisor beforehand.

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