Is Your Pension Pot of £100,000 Enough for Retirement?


One of the most important questions you should be asking yourself is whether your pension pot is enough to last your retirement years. Analysis has shown that if you are putting down more than five percent per year, you could still not have enough for your retirement, in fact you could have an empty bank account by the time you reach eighty.

In fact the analysis focused on people retiring in 2000 with a £100,000 pension pot and found that if the saver withdrew seven percent each year, they would run out of money by 2014, that gave them only £7,000 per year.

For those who only took six percent a year, they still had a small amount left in 2014 but still not enough left by the time they reach 2020. This information is valuable for anyone who wants to manage their limited savings to ensure a financially secure retirement. Men should manage to enjoy retirement for around eighteen years and women for twenty years.

Final salary schemes are safe and ensures that the employee enjoys an annual income, which is inflation protected for the rest of their lives, but in the private sectors, employees are contributing towards defined benefit schemes, where they built up their pot in the hope it's enough for retirement.

The best option in 2000 would have been to take a lower income at the beginning, investing the money in equity income funds. These increase over time. Those who chose this option in 2000 would have received an income of around £2000 per year, but that would increase to £4000 in the last year. There would be no risk of the money running out.

Today's options

As you start approaching retirement you have to ask yourself what you can do over the next few years to ensure your own financial security in your retirement. You can do what you want with your money, you can put in all in one specific pension pot or you can buy property, there is no right or wrong, but there is tax complications that you have to take into consideration.

A single life annuity in the current market, which is when the income dies when the person dies, will pay out in the region of £5,200 for each £100,000, but it doesn't increase with inflation.

It is essential to ensure you seek professional financial advice from PWS Dubai to ensure you save enough to enjoy a comfortable retirement in the future.

Comments

Post a Comment

Popular posts from this blog

Are You Prepared to Work Longer Than Anticipated to Ensure a Comfortable Retirement?

Image
There has been quite a reshuffle when it comes to retirement age in the United Kingdom. It has gone as far as Chancellor Philip Hammond possibly using the November 22 Budget to refocus on the balance between young and old, getting the younger to pay for the older so that they can benefit. The concern is that official data has suggested that the elderly are already working for longer than they anticipated to ensure their financial security before retiring. This is becoming a common trend and we are seeing our older generation working longer and longer in order to secure their financial security, bridging the gap between an inadequate pension pot and a longer retirement. In fact the Department for Work and Pensions in the United Kingdom released statistics who show that the average retirement age has exceeded sixty five for men for the first time and women are closing in very quickly. There are more than one in ten men working over the age of seventy, while eight
Read more

PWS Group - Five Effective Tips to Rid Yourself of Debt

People of all ages find themselves in debt from time to time. From credit cards to loans and even mortgages, most people owe some money somewhere. Sometimes the debt can become too much, especially if you find yourself on the verge of being retrenched, then your income is going to disappear and paying back these debts is going to be even harder than anticipated. Also remember at any age, you want to be saving for your retirement, something you should be looking at from the day you start work. Stop Borrowing Money Today The very first step to getting out of your debt quickly is to top borrowing. Often you will find you use your credit card as you near the end of the month so you can continue your current lifestyle. Not using the credit card may mean you cannot go out this weekend or you cannot buy the new furniture you wanted straight away, but you won't be borrowing more money and therefore it will help you pay back the debt much faster in the long run. Set Up
Read more

Retiring This Year? You Could Receive Almost £20,000 Per Annum!

Image
Those retiring this year can enjoy £1,200 more than those who retired ten years ago. While this is the case, which pushes the pre-tax income to £19,900 per annum, there are still those who have not planned and saved for their retirement years. In fact, forty six percent of those retiring feel that they are not financially prepared for giving up work or they are not confident in the preparations that they have made. Those who retired last year, were receiving £18,100 per annum, which has now been boosted to just below £20,000. Final salary pension schemes which provided retirees with a generous inflation proof income have become far and few between these days with only a half of all employees who are nearing retirement being in the position to have an income which will ensure a comfortable retirement. Twenty seven percent of these soon retired persons believe that they don't have enough pension to retire comfortable in the long run. Our biggest concern here a
Read more