Cost of living crisis a reminder to prioritize your pension

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Russia’s actions in Ukraine have had serious consequences for its people.

It will also continue to impact our lifestyle and personal finances, so it reminds us of the importance of taking care of our money.

We will probably stop importing their oil and gas, and the Russian government will then retaliate by refusing to import from Europe.

It’s a lose-lose situation that will aggravate the cost of living crisis. But it was Putin’s idea and we have no choice.

So let’s look at the financial side.

Many of us have life insurance policies that will pay our dependents upon our death.

But we forgot about the years before, as our working lives go on and we have to live within our means.

This is why planning for a comfortable retirement is more essential than before.

Don’t put off your retirement! Start your retirement fund as early as possible – in your 20s or early 30s, if possible.

If you already have a pension, ask your employer or pension adviser for a current valuation and benefit forecast – find out what your pension is likely to earn you!

Once this has been clarified, decide how much you expect your pension to be when you retire. Apply for it whether or not you already have a pension in place.

Now work backwards and calculate the monthly contributions that this income goal requires today. Then, compare the returns based on several different monthly payments.

Take inflation into account! Your pension return forecasts may seem like reasonable numbers today, but remember that the real “buying power” of your monthly retirement income is for a 40, 30 or 20 year period. .

If your company still does not have a pension plan in 2012, the government will “automatically enroll” you in a public plan. Many experts predict that these systems are unlikely to perform very well. You must listen!

Company plan or private pension? If you decide that the public plan does not meet your needs, you should consider taking out a private pension. It won’t happen by itself – you have to act!

What will happen to the state pension? In 30 years, it could be worth much less than today, in real terms. Factor this into your planning.

Keep in mind that we are living longer. The minimum retirement age is increasing to reflect increased longevity.

The minimum age for receiving the state pension should be raised from 65 to 68 after 2024

Think of your pension as a long-term savings option, where the government gives you generous tax relief for every pound you save.

Have you built up a savings nest egg over the years that could now be allocated to your retirement?

Your pension could now be his best home.

Michael Kennedy, independent financial adviser and pension specialist, can be contacted on 028 71886005. More information on Facebook at Kennedy Independent Financial Advice or at www.mkennedyfinancial.com

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