If you have not reviewed how much you are saving for life after business, maybe it’s time to look at it again.
Traditionally, financial advisers have helped clients set a contribution level based base on what they could reasonably afford to invest.
However using a different approach, work out what they would need in today’s terms if they were retiring today.
For example, if you wanted an income of £25,000 a year, on top of the state pension, it is possible to estimate what the fund value needs to be assuming various grow rates and a long term inflation estimate.
Once you know what these numbers are you can then calculate what pension contribution should be being made. Of course its not possible to be absolutely accurate about how much the income will be, but nevertheless it’s a better approach to deciding how much to invest into your pension.
A regular review of whether to see if you are on track is necessary so that any adjustments can be made if necessary.
If you have not reviewed your contributions recently, call us on 01902 742221 to speak to a consultant.
