Pension Goals – have you planned for your retirement?

Pennsion Goals

With recent announcements on savings needed for a minimum or comfortable retirement made by Pensions and Lifetime Savings Association (PLSA), now is as good a time as any to consider what your retirement goals as a business owner or individual are if you haven’t already got ones in place.

When it comes to personal wealth management, at LHP one of the first questions we ask our clients is ‘what do you plan to do in the long-term with your retirement?’ and ‘what about your pension and life saving goals?’, ‘do you have special lifestyle aspirations’ and ‘do you need to create more wealth or more time away from the business?’

How much does a basic retirement cost?

If we don’t make our goals happen often what we end up with is a basic retirement. According to a recent announcement by Pensions and Lifetime Savings Association (PLSA) a single person will need post-tax annual income of £10,900 to maintain a minimum standard of living in retirement.

The minimum living standard here covers pretty basic needs and enough for some social activities, including a 1 week holiday in the UK, eating out once a month, but not running a car. That spending budget increases to £16,700 for a couple and also includes subscriptions and services like getting a haircut. This can be a reality check for those of you with lifestyles outside of this frugal living scenario.

Planning for a moderate or comfortable retirement

If your pension goal is for a moderate retirement, which by Pensions and Lifetime Savings Association standards includes a two-week holiday in Europe and ‘more frequent’ eating out, you’re looking at a yearly budget of £20,800 a year for a single person, (£600 higher than two years ago), or £30,600 for a couple (up £1,500 from 2019).

For a comfortable living standard in retirement you’ll need to have put by £33,600 a year as a single person or £49,700 as a couple. This covers additional costs – regular beauty treatments, theatre trips and annual maintenance and servicing of a burglar alarm.

At LHP, we take the time to understand your business goals and encourage business owners to think about whether they’re saving enough for the retirement lifestyle they want and making the most of the employer contributions on offer in their workplace pension – all as part of our business advisory service.

Let’s Talk

If you are a business owner and wish to discuss your personal wealth goals, let’s Talk.

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