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75% of 55-64 year-olds worry about pensioner poverty. Could these 3 steps protect YOU from destitution?

Worried about how healthy your finances will be once you retire? If the answer is yes, then you’re not alone. Indeed, a recent report from OneFamily revealed the shocking extent to which British citizens are feeling stressed when it comes to contemplating how much cash they’ll have to live on later in life.

According to the financial services provider, some 75% of 55-64 year-olds surveyed said they “don’t feel confident” they’ll have enough money by the time they hang up their work gloves. This is despite a whopping 96% of participants saying the issue of retirement funding sits high on their list of priorities.

Red alert!

This doesn’t come as a shock to me, and I’m sure it doesn’t surprise you either. Under current State Pension rules, the maximum you can expect to receive a week sits at £164.35. Or to put it another way, this comes out at just £8,546.20 each year. How does that compare with what your net salary clocks in, and can you envisage having to stomach such a drop in your annual income?

Sure, some of the things you pay out for today, like a mortgage, a large car loan, or big childcare costs, might not be hanging over you by the time you come to retire. I still doubt, however, that for many of us the current pension will still be able to cover even the most basic costs of living.

Besides, I don’t know about you, but I plan to live in comfort when I finally hang up those metaphorical workboots and do all the things I don’t have the time for right now. I have more ambitious plans for my autumn years than ‘just surviving.’

3 top tips to avoid pensioner poverty

It’s obvious then that we can’t rely on the state to take care of us in our later years. But don’t worry, as there are a number of steps we as intelligent investors can follow to help create a comfortable retirement. These include:

  • Maxing out your ISA allowance. Under current rules it’s possible to stash away £20,00 each tax year into your ISA wrapper, letting you avoid losing a decent proportion of your hard-earned cash to HMRC through crushing income tax and capital gains tax bills.
  • Ignoring low-yielding investments like cash products. If you’re approaching retirement then there’s no time to waste on low-risk products like Cash ISAs. The best-paying of these products still yields less than 1.5%, leaving little scope to make big returns on your excess cash before leaving the office for the last time.
  • Hunting for big dividend yields. Putting yield above all else can be an extremely dangerous business when you’re shopping for income stocks, with excessively-high readings often suggestive of a company in turmoil. With the right research, however, it’s possible to unearth some big-yielding beauties to make some big returns today and in the future.

I’m just scratching the surface here, of course. The point is that it’s critical to start thinking about how to safeguard your financial future and not just rely on paltry state benefits when the time comes. And obviously the sooner you grab the controls, the better.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.