Many of us dream of retiring in luxury, but if you want to do this, you will need an income to match. If you want to know how to boost your retirement income now, we’ve explored eight options for you to consider.
1. Have a plan
Saving up for retirement is the same as saving up for a holiday, car or deposit for a home. You should have a goal in mind, and a point in time when you want to reach your goal.
Think about what you want your retirement to look like. Include things that could increase your expenditure, such as expensive hobbies and international travel.
Work out how much your lifestyle will cost. Depending on your age, you will need to make allowances for inflation. You will then need to work out the size of the pension pot you will need.
This doesn’t have to be complicated. For further information and a calculation method, check out our article on living off your investments.
2. Start investing
As the saying goes, the best time to start investing is yesterday, the second-best time is today. And while earlier is better when it comes to boosting your retirement income, it’s never too late to start.
So if you haven’t already done so, look at your personal finances, work out what you can afford, and start putting money aside.
3. Use your company’s pension scheme
Thanks to auto-enrolment, there has never been an easier time to start funding your retirement. This is because you’ll be automatically signed up to your company pension scheme when you start your first job.
With most defined contribution schemes, you will be expected to make a contribution from your salary. This might seem like a sacrifice if you are on a low income, but you shouldn’t leave your company’s scheme.
With most defined contribution pensions, the employer will also make a contribution. If you choose to withdraw from the scheme, you will miss out on the extra income.
4. Keep track of your investments
If you want to retire in comfort, it’s advisable to regularly check your investments. Keeping track of your investments will ensure you are on target to meet your goal.
It’s best to check your investments just before the end of each financial year. If you are 10 years or less away from retirement, it’s worth checking your investments every six months.
Make sure you make the National Insurance contributions required to maximise your State Pension. This is especially important if you experience periods out of work. Further information is available on the gov.uk website.
5. Increase your payments
When you start working, you can start by paying whatever you can afford into your pension. As you progress through your working life and your salary increases, get into the habit of increasing your pension contributions to boost your retirement income.
The same goes for any bonuses, share options or other financial schemes set up by your employer. It’s a good idea to pay part of it into your pension.
6. Add lump sums
If you are lucky enough to receive a financial windfall such as an inheritance, a win on the premium bonds or some spare cash left over from the sale of a home, pay part of it into your pension.
7. Combine all old pensions into one
The chances are that you will work for more than one employer in your working life. So you could end up with multiple pension pots in multiple schemes.
Combining multiple pension schemes into a single pension will reduce the management fees and charges, which will increase your investment. It will also make it easier to track and manage your savings.
8. Continue working
If you are tracking your investments, you will know if you have enough time to accumulate the desired amount in your pension pot. So if you think you need to boost your retirement income, you can choose to keep working and defer your pension.
If you choose to do this, you will need to notify your pension provider. You’ll also need to notify HMRC if you want to defer your State Pension as well. For further information, check out our article on deferring your pension.
Is there anything else I can do?
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