All You Need To Know About Retirement Planning

All You Need To Know About Retirement Planning

July 27, 2023 3:03 pm Published by

Getting To Grips With Retirement Planning

Most people work hard all their lives so it’s important to reap the benefits of retirement, as retirement approaches for some people it can be daunting and is a huge change whether it be your routine or everyday life. Planning for retirement is a huge positive and can help guarantee you a comfortable life when it’s time to kick back and relax.

All You Need To Know About Retirement Planning

Why is planning for retirement so important?

Nobody knows what the future holds but it helps to prepare and do all we can to keep the odds slightly in our favour. So planning for the future, especially retirement, is a good idea. Some of the reasons why we need to plan for retirement are listed below.

1. We can’t work forever

At some point in life everyone reaches a point we’re they can’t work anymore or simply don’t want to. With no wage coming in you’re going to need a replacement source of income.

2. State Pension

You’re guaranteed a state pension if you have worked for at least 10 years of your life and paid national insurance otherwise known as stamps. The maximum state pension anyone can receive is £175 per week as of August 2020 this averages out at around £9,110 per year. So looking at the figures on paper this isn’t a lot for a person to live on even in a couple you would fall short of the typical average needed to live on by a couple in the UK.

3. Compounding Returns

Compounding returns is the term used to describe how investments increase over time, for example if £100 increased by 5% by this time next year you would have an extra £5 and so on. Investing young would mean a longer time frame of your investment guaranteeing compounding returns for as long as 50 years.

4. Longer Life Expectancy

The average life expectancy has increased over the years so people are living longer meaning more time in retirement. The good news is people are getting to enjoy their retirement and spend more time with family. But the not so good news is people are having to make their finances stretch further as your money needs to last longer.

5. Retirement is Meant to be Enjoyed

Retirement is something almost everyone works hard their entire life for so why shouldn’t we spend it doing the things we love, visiting the places we love or even treating our loved ones every now and again. Like anything in life nothing comes free, money from a pension could provide the extra stability to enjoy all those things, if you still have to work to provide a stable income then you’re going to have less time to do the things you have planned.

6. Declining Health

Unfortunately growing old comes with its problems and you may see your health decline sooner than you would like. Serious health issues can be costly which is why it’s important to have financial stability.

7. Financial Burdens

We can experience financial expenses at any time in our lives just because we grow old it doesn’t mean they stop. Having financial stability in retirement helps lessen the burden on family members, some circumstances are unavoidable but a decent retirement fund lessens the risk.

8. Less To Worry About

Once everything is in place for your retirement look on the bright side it’s one less thing to worry about. If you’re an anxious person or overthink a lot this could be like a weight lifted off your shoulders, giving you a boost in morality and having a positive effect on your mental health.

Need Help With Retirement Planning?

At The Lost Coin Financial Planning Ltd, we offer professional retirement planning services to our clients in and around Bristol. No matter what age you might be, it’s never to early to start planning for your retirement. Simply get in touch with us today to see how we can help you.

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