Saving for retirement…
So how do you decide with the new pension rules how much you will need for your retirement?
In my opinion, this question has two sides to it. If you think you will live to say 86 years old, then are you not saying to your psyche, that you only expect to live till that age. You may not believe this will have an effect on you, but I say it will, as your subconscious has more power over your body than you might think!
The other side to this question is, in deciding how log you will live, how much money/investments you need to live off between the age you are now through to the age you die.
How I see this, is why not choose a ripe age of say 100 and plan accordingly. Of course depending on your present age, might mean you will need more funds to see you through to an ‘older’ final age.
The reason this is now an even more important question is due to the radical relaxing of restrictive pension rules which has handed complete freedom to people to decide how to manage their own money in retirement. Some might see this as the burden of responsibility has been handed over to individuals.
Personally, I think this is a good thing and of course, even though we now have more control over our pension pots, you could still invest the funds in the same way as before.
However, if you want to draw down the funds, then you can do so, after the appropriate taxes have been deducted. Saving for retirement has never been so relaxed and interesting as it is with the new rules brought in at the last budget.
As the shackles of pension rules are loosened, individuals will need to make sure they consider the ‘How long have I got to live?’ question even more and show restraint in the coming years. People must avoid the rapid depletion of savings, which have been earmarked to pay their living costs once they give up work and move on to retirement.