“You know that retirement is coming. It isn’t as though it just shows up one day and takes you by surprise, so you need to get ready for it.” — Batya Shevich
For many in their early 30s, retirement can feel far off, but starting pension planning early is one of the smartest financial moves you can make. Life’s uncertainties and changing priorities mean your financial needs will evolve over time. With careful planning and the support of a trusted financial adviser, you can shape your money to support your goals at every stage of life.
Understand Your Retirement Income
Start by estimating how much income you’ll need versus how much you’re likely to have. Gathering pension statements, including State Pension, Defined Benefit and Personal Pensions, helps build a clear picture of your financial outlook. Early planning gives you time to close any gaps and adjust your strategy.
Protect Your Pension Savings
Avoid unnecessary risks with your pension. Many approaching retirement have used their pension pots to pay down debt, which can jeopardise future income security. A solid financial plan addresses debt management early, helping preserve and grow your retirement savings.
Grow Your Pension with Long-Term Investing
Maximise your pension by investing for steady, long-term growth, especially if retirement is 15 to 20 years away. Market fluctuations are natural, but time allows you to recover. As retirement nears, work with your adviser to gradually shift towards lower-risk investments to protect your capital.
Consider Your Income Options Carefully
Annuities remain a sensible option for some, offering guaranteed income for life or a set period. Before deciding, consider how you plan to access your pension savings, tax implications and the impact on benefits eligibility. Thoughtful decisions ensure your retirement income supports your lifestyle and tax goals.
Navigating Offshore Pensions
For those with international interests, transferring pensions to Qualifying Recognised Overseas Pension Schemes (QROPS) or similar can be beneficial but complex. Transfer fees and ongoing costs must be weighed against tax advantages. Seek expert advice to ensure your decisions align with your retirement objectives.
Make Informed Decisions
Retirement planning is about more than just building a nest egg. It is about securing financial independence, protecting your family’s income and passing on wealth tax-efficiently. Work closely with your adviser to craft a strategy that suits your goals and risk tolerance.
The Bottom Line
As Paul Lewis says, “Financial planning is really just arithmetic.” Regularly review your income, expenses, savings and investments. Adjust your lifestyle or income as needed to stay on track.
It is never too early to start pension planning. The sooner you begin, the better your chances of enjoying a secure and fulfilling retirement.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment.