pension

Nothing Better Than Retiring In Peace

Growing old is a natural procedure which is bound to happen to all of us. Those who are preparing for it should know the benefits of planning a retirement fund to meet all the requirements in the old age. Looking at the present times and considering your lifestyle one can easily predict the requirements for you in the years to come after you are retired. These appropriate amounts could prove quite near to accurate when you consider the fact that you are the one to control the expenses at home. In order to achieve the required financial level in pension you need to keep an eye out for the fund and the amount of return it generates over the time.

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Hire an expert

Retirement can already be a very crucial issue for many to even consider discussing. It is one time in life which is not supposed to be stressed or full of worries. This is why you need to plan it early and ensure complete financial freedom for your family requirements. Value of your pension fund is what keeps your future secure against any financial turmoil. In order to keep it safe you can try using the help of experts who know how to handle money well. Visit sites like http://www.pensionreviews.org to know more about the financial advisors who can be of assistance to make you feel secure about the retirement plan.

Making your retirement stress free depends on how well you plan and execute the financial part of it. Nothing can be predicted to perfection but there are means to get an approximate value that can suffice major needs for anyone. Planning you retirement in a proper way can be crucial as it can help you avoid dependency on anyone else when you have no source of income later.

Plan it early

There is nothing like planning early for any kind of future contingency. This will allow the person to stay calm and progress in a gradual manner towards the goal set out in the initial phase. Having a solid retirement corpus and deciding for it early in our youth would be the ideal way to start for it. Money management that can help sustain a good lifestyle is paramount for each one of us. A tension free life await for the people who are planning early for a time when you don’t have to work after the age of 60 years. There are many ways to keeping your financial interests safe. The best way is to keep in check the savings that you are doing and ensure you have proper designs in mind rather than random installments.

Most people just buy a scheme for the sake of having investments. This is not bad as investment in any form is always going to be useful. Only that you want to be aiming for specific returns that can match the needs of future. Economic hardships awaits those unaware of financial planning methods. At least you should be able to acquire the services of some expert who can give valuable advice with regards to proper execution of plans. Many means are made available by government and private financial firms that one can depend on to form a retirement fund. Insurance, fixed deposits, savings certificates, equity and debt instruments are just examples of the various plans that one can use to safeguard their family against problems.

Play well to win

Always remember that finance is unpredictable when it comes to market movement and future planning. It is very critical to continuously evaluate the whole situation so that you don’t miss out good opportunities that can benefit you in the long term. Mixing it well is also a great tactic when investments are concerned. Never keep all the money in same kind of financial instrument like government bonds or bank deposits. A person who is unwilling to diversify is going to rue on such a grace mistake. Once you have formed a good amount of retirement fund then it is better to call in the expert from sites like PensionReviews.org as they can aptly help with maintenance of the whole corpus. They can help you manage it well and avoid any kind of volatility that could erode the value of your future funds.


Can You Manage a Mortgage on Pension?

Paying off a mortgageWhen it comes to retirement planning one of the most common pieces of advice is to pay off your mortgage as quickly as possible. No mortgage = less financial stress. But what if you want to buy a new home after you retire? Will you be able to get a mortgage and will you be able to manage the payments?

What counts against you?

To be brutally honest, your age makes you very high-risk. Lenders can reasonably expect people in their 20s, 30s and 40s to live long enough to repay their mortgages. The chances of you living long enough to repay a mortgage for 20 – 25 years start to look a little slim when you hit your 60s.

Your income is also, obviously a factor. As a pensioner, your income is fixed and, unless you’ve been very, very good at planning for retirement, it won’t be as high as it was when you were working, which means that you’ll probably have to settle for a smaller loan than you would if you were 20 years younger.

What’s in your favour?

You’re probably not looking for a three-bedroom, two-bathroom, and double-garage house. Two beds, one bath, one garage and a modest garden will do you fine; something like a cottage. Small houses are cheaper than big houses, which is great on a fixed income.

Unless you’ve been renting all your life, you probably have a home that you can sell which will help significantly with a deposit. The ideal is for the sale of your old house to cover the cost of your new home. But if you’re moving to a very popular retirement area (Florida, to haul out a tired cliché) or want to buy in a retirement village then you might come up a little short. The shortfall shouldn’t be overwhelming, however, which means that your mortgage should be manageable.

If you have been renting and you don’t have a house to sell then you should (in an ideal world) have a comfortable nest egg (in addition to your pension) that can serve as a deposit. Deposits are very important.

You’ll have built up a good credit history and a solid financial record, which will stand you in good stead in any loan application process.

It’s illegal to discriminate against anyone based on age. Yep, credit providers are not actually allowed to deny you a loan because you happen to be over than 60 years old.

So, can you manage a mortgage on your pension?

If you’ve planned properly for your retirement then you should be able to manage a modest mortgage – provided you consider all sundry expenses, like maintenance, insurance, rates and taxes. It helps even more if you have an existing property to sell. It’s also a good idea to find a lender than specialises in mortgages for over 60s. Before you make any final decisions, however, you should talk to your financial advisor.

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Written by Sandy Cosser on behalf of Ooba, a home financial services specialist that offers bond registrations, pre-approvals and second bonds.


Thinking Ahead for Retirement Income

Thinking Ahead for Retirement Income

When you’re working and paying some of your salary into a pension every month, you probably don’t give it much thought. But as the time to retire draws near, there are decisions to be made on how to use the money that you’ve been putting aside in your pension over the years.

How much you have managed to save during the years will depend on how long you have been paying into a pension and whether it’s a personal pension plan or a company one. You may have done it yourself with a Self-Invested Personal Pension.

What most people choose to do is to take a cash lump sum up to the value of 25% out of their pension savings from the age of 55 or when they actually retire. This is tax-free and you can use it how you wish. However, the rest of your pension isn’t so easily accessible. As your pension contains government contributions via tax relief it means that you can’t just fritter that fund away; it’s there to provide you with an income for the rest of your life.

The most common option that people about to retire take is to purchase an annuity. A pension annuity is where you cash in your pension savings (usually minus the 25% cash sum) for a lifetime income via an insurance company.

The amount of income your pension qualifies you for depends on the annuity rate that you get, as well as other factors including your health and life expectancy and whether you want your annuity income set to rise with inflation or at a fixed rate. You can find out what kind of income you are likely to obtain by using the pension annuity calculator from Age Partnership.

Age Partnership is an independent company that offers financial advice and solutions for those aged 55 and over. The company searches the annuities market for the best possible rates most suited to its clients’ needs. Taking out an annuity is a permanent commitment, so it’s best to seek independent financial before deciding which is best suited to your particular requirements.


How Much You Should Be Saving for Retirement

How Much You Should Be Saving for Retirement

While many pension experts will give you ‘rules of thumb’ to save for retirement, the truth is that the kind of pension pot you will need is completely dependent upon your individual circumstances.

Planning

There are, however, some basic steps that you can take to start planning how much you should be saving.

The most important step in planning how much to save is to calculate how much you will need in income when you retire. You should keep careful track of your expenditures over a few months time if you do not already do so, and review your outgoings.

Consider the expenses that will remain the same when you retire as well as the expenses that will have changed. For example, when you retire you may have paid off your mortgage, but may have extra expenses for travel or healthcare.

Then consider the income that you will have in retirement, as your pension may not be the only source. Be sure to factor money you will get from property rental or other investments, as well as the State Pension.

You can then divide your target retirement income by a reasonable annuity rate to see how much money you will need to purchase that level of income. For example, with annuity rates at record lows, you may want to use the figure 4.5%. If you decide that you want an annual income of £20,000 as a pensioner, you will need to save around £444,000.

If annuity rates go up, which they may well do in the next 10 years, a rate of 5.4% requires you to save £370,000 to get your dream income of £20,000 per year.

Compound interest

If these numbers seem like impossible sums, keep in mind that you will be investing over the long-term, and that your money will ideally have decades to grow until your final retirement date.

Since growth is crucial to reaching your pension pot goals, use a compound interest calculator when figuring how much you will need to contribute to your pension between now and retirement. Younger savers will be able to get away with saving hundreds of pounds less per month than older savers, simply because compound interest and time is on their side.

Another important issue is that once you have planned your contributions, your retirement planning is by no means complete. Keep your calculations under regular review, as figures are likely to change over time.


Four Scenarios for Pension Buyouts

Four Scenarios for Pension Buyouts

When companies are looking to downsize but would rather not lay off workers, they often offer a corporate pension buy out (for companies in the private sector) or civil pension buyouts (for those in the governmental sector). Buyouts typically do not offer as much money as early retirement options, but they can still be invaluable to those who aren’t close to retirement. You can often receive annual pension payment buy outs or a lump sum. While lump sums can be rolled over into an IRA (and thus, are not usually taxed), regular payments are typically subject to fees. No matter which option you choose, there are benefits to accepting a buyout, rather than waiting around if your company’s future is uncertain.

1) Eliminate debt.

Although it may not seem fun to use your pension buyout to get rid of back bills, it can be one of the best decisions you have ever made. Debt is like a vicious chronic disease; as long as it is not paid off, it only grows larger and creates more havoc in your financial life. Even if you are paying the minimum or more on your credit cards or loans, interest is accruing each month. This means that the debt is growing all the time, even when you are throwing money at it. By paying off as much debt as you can in one shot, you can ultimately save yourself hundreds or thousands of dollars in the long run. This is especially true of big purchases (like real estate) or items with a high interest rate (like some credit cards).

2) Finance a college education.

College educations aren’t cheap, and guess what? Financial aid loans also carry interest rates, albeit typically low ones. If you can pay cash for your child’s (or your own) college degree, you can eliminate further debt and start off with a clean slate, in terms of credit. Although your child may not realize it now, this is one of the best gifts you can ever give him/her.

3) Make that dream purchase/investment.

Have you ever thought of starting a new chapter in life after retiring? A buyout can help you achieve your dreams earlier than expected. Whether you want to downsize your home and move to a warmer climate, buy an RV and travel the country or start up that bakery you’ve always wanted, a pension buyout can help you finance those wishes.

4) Pay for an emergency.

As unglamorous as spending your pension sum on an emergency is, it can be a lifesaver. If you or a loved one ends up in the hospital or is dealing with property damage, your pension can allow you to pay off those bills without losing sleep/accruing additional debt.

Jessica writes about a wide variety of topics. She especially enjoys writing about finances. You can learn more about Annual Pension Payment Buy Outs at http://www.uspensionfunding.com/


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