Are you nearing retirement age and concerned about the size of your pension pot? You’re not alone.
According to one recent personal finance study, on average, those aged 55 and over in the UK believe that they need an extra £184,484 on top of their current savings and pensions to live a comfortable lifestyle in retirement.
Another study found that the average pension pot of those aged 55-65 in the UK is just over £100,000, which is a long way short of the £300,000+ or so you need to live comfortably in retirement. Clearly, many people are more than a little bit short when it comes to retirement savings.
The good news, however, if your retirement savings are still on the low side, is that it’s actually possible to boost your pension AFTER retirement age. Here, I’ll look at how those aged 65 and older can boost their retirement savings.
The first thing to realise is that there’s nothing stopping you from working a little longer after you turn 65 in order to boost your retirement savings. Given that the ‘default retirement age’ no longer exists, no one can force you to retire. Today, many people in the UK (over a million people last year) are working past 65 in an effort to save more for retirement with some even working into their 70s.
Bear in mind that working longer doesn’t necessarily mean staying in your old job. It could be a great time to try something new. Nor does working longer necessarily mean working nine-to-five. You could potentially work part-time, or even on a freelance basis through websites such as PeoplePerHour. Whatever your skill-set, there are plenty of ways to find work at 65 today.
Think outside the box
There are also many ways to generate income today that don’t involve working for someone else. For example:
If you own your home, you could rent out a room on Airbnb.
If you own a car parking space and don’t use it, you could rent it out on websites like Stashbee or JustPark.
If you’re not using your car, you could even rent that out on websites like Getaround.
Ultimately, technology has made it easier to earn some extra income. With a little bit of initiative, you could potentially bring in hundreds of pounds per month through the internet.
Save into a pension
Finally, it’s worth noting that you can pay into a Self-Invested Personal Pension (SIPP) up until age 75.
The benefit of continuing to pay into a pension is that you’ll receive tax relief on your contributions. So, for example, if you’re a basic-rate taxpayer and you make an £800 contribution into your SIPP, the government will top this up to £1,000.
You can contribute up to £40,000 per year, or 100% of your income if you earn less than £40,000, into a SIPP and qualify for tax relief. And even if you are not earning, you can still contribute up to £2,880 each tax year and receive tax relief on your contributions.
If you’re looking to boost your pension after 65, paying into a SIPP could be a smart move.
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