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.

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