Pension Mistakes

Pension Mistakes You Need to Avoid

havenifa

havenifa


Posted on: 16th October 2023

After a few turbulent years that have seen many of us shaken by the loss of work and increased struggle through the changing face of the world, it is not unusual for many of us to want retirement to come much sooner rather than later. We all want to enjoy our lifestyle and live the retirement we deserve, but now more than ever it takes careful planning to achieve it. Making sense of financial freedom and filling our time with hobbies, passions, and priorities is the goal – but many mistakes can happen without realising it that can significantly impact our income in later life. Here are some pension mistakes people are making and why you must be aware of them.

Saving

The first mistake is delaying your pension savings. Starting early is the best way to go when setting up your retirement planning Cheshire.

Having a longer period to build up your pension pot and benefit from more compound interest is the best reason not to procrastinate on your plans. Even a small amount can become something monumental later in life. Another problem comes with not saving enough to meet your retirement goals.

It can be tempting to only put a bare minimum into your pension throughout yourworking life. However, more significant contributions will help you enjoy your later life years at the best levels of financial comfort.

Opting Out

If you are not automatically enrolled on your workplace pension, you are missing out on employer contributions – effectively free money towards your retirement.

If you rely solely on your state pension, it will provide you with a valuable safety net within retirement – but it will not be enough to ensure the standard of living you hope for when you retire. It is crucial to ensure you have personal pension savings in place to provide financial security and a decent quality of life following your decision to wind down your working life.

If you are under financial pressure – as we all have been in the 2020s so far – it is tempting to dip into your pension pot to get you through the struggle periods. That can lead to paying more income tax and losing a lot of the tax-free allowance, reducing your retirement income. Instead, set up a separate emergency fund for those times when difficult financial periods take effect. That helps to keep your plans secure.

Protecting your retirement plans is hard in the face of financial hardship, but independent financial advisers Manchester can help keep things working. Contact the team at Haven IFA today for pension advice Manchester to avoid pension mistakes and make the right choices towards a happy, secure retirement.