What Happens When You Retire
There are lots of things you might not like about getting older. The grey hairs or the wrinkles don’t tend to be anybody’s most favourite things.
One thing many people do look forward to is their retirement. Finally!
No more having to get up every day to join the rat race. No more 9-5! Imagine!
The thing is, living costs are so expensive many people have to wait longer before they can actually give up work for good.
link: Simon Cunningham
If you’ve been wise and taken out a defined private pension, once you retire you’ll get a fixed amount of cash from your plan. This money could be in the form of a lump sum, or it could be paid in monthly instalments.
If you take the lump sum, it’s wise to use some of this to pay off any outstanding debts so you can minimise your outgoings. Without your salary, you may have to make a few cut backs on your lifestyle.
Sometimes people don’t actually realise how much their pension is going to give them a month to live on. Many don’t understand that the amount of your pension is based on how long you worked for and how much you were paid during that period of employment.
If your retirement fund is contribution based, the size of your payout will depend on how the investments backed have performed. There’s no guarantee you’ll receive even as much as you put in in the first place
That’s why it pays to think carefully when you take out a plan in the beginning. If only we could give our younger selves this advice!
If your pension just isn’t enough to live on, then you’re in the same boat as many folks who are meant to be enjoying their retirement. After a lifetime of working, it would be nice not to have any money worries.
Many people consider downsizing to boost their savings, but this isn’t always the money saver you may think. The experts at Retirement Line say it’s something you should consider extremely carefully. If your mortgage is paid off then, you could end up incurring more debt. At this stage in your life, is that something you want to take on?
You can have some of the equity released from your home and still live there without paying any rent. It may mean the kids get a little less in their inheritance, but it’s your home and you might need that money now. You might be sitting on your most valuable asset.
We’re living longer than ever before so you could potentially have to make your pension last 30 years or more. Young people, these days may delay getting a pension not realising what a significant impact it will have on their retirement itself.
No one wants to have to scrimp and watch the pennies throughout their golden years. There’s usually been enough of that already in most people’s lifetimes at some point or another!