City thinking, local knowledge

What to Do if You’re Worried You’ll Run Out of Money When You Retire

By Questa Chartered

Is the thought of running out of money when you retire keeping you awake at night? A recent survey reveals that A staggering 48% of people fear that their pension savings won’t stretch far enough. And 56% admit they haven’t saved enough for retirement.

Women, in particular, are more anxious than men, and surprisingly, even a third of over-65s are worried they might outlive their funds. But how can you ease those genuine concerns if you fear a financially insecure retirement?

Let’s take a closer look at some practical steps to take control of your future finances.

Assess Your Situation

First things first, take a deep breath and assess your situation. Understanding the size and scope of your pension pot, along with any other savings or assets you have, is crucial.

You’re not alone in feeling anxious; many people realise they might not have enough to maintain their desired lifestyle in retirement. However, the sooner you take stock of your financial position, the better positioned you’ll be to make informed decisions moving forward.

Engage with Your Pension

For many, pensions can seem like a complex and distant concern, but becoming actively engaged with your pension scheme can demystify the process and empower you to make changes.

If you’re part of a defined contribution scheme, understand how your money is being invested and whether these choices align with your retirement goals. If your employer offers contribution matching, make sure you’re taking full advantage of this benefit to maximise your savings.

Explore Ways to Boost Your Pension

If your assessment reveals a potential shortfall, it’s time to explore ways to boost your pension. One of the simplest methods is to increase your contributions. Even small increments can make a significant difference over time due to the power of compound interest.

Consider any opportunities for additional income that could be directed into your pension, such as bonuses or a side job. Remember, it’s never too late to start saving more, and the earlier you begin, the better.

Consider Professional Financial Advice

The world of pensions and investments can be overwhelming, but you don’t have to navigate it alone. Seeking professional financial advice can provide clarity and confidence in your retirement planning.

A financial advisor can offer personalised strategies to maximise your pension pot’s growth and suggest other savings or investment opportunities to supplement your retirement income. This step is particularly crucial if you’re considering more complex options like transferring pensions or investing in higher-risk assets.

Plan for a Flexible Retirement

Redefine what retirement means to you. The traditional view of stopping work entirely at a specific age is evolving. Many now see retirement as an opportunity to pursue part-time work, freelance projects, or even start a small business.

This flexible approach to retirement can not only provide additional income but also keep you mentally and socially engaged.

Embrace Simplicity

Finally, embracing a simpler lifestyle in retirement can stretch your savings further. Analyse your spending habits and identify areas where you can cut back without significantly impacting your quality of life.

This might mean downsizing your home, reducing discretionary spending, or finding more cost-effective ways to enjoy your interests and hobbies.

The prospect of not having enough money in retirement is a genuine concern for many, but it’s not an insurmountable problem. By taking proactive steps to understand, enhance, and manage your retirement savings, you can create a more secure and fulfilling retirement for yourself.

Remember, the key is to start taking action today.

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