Retirement Planning

A good starting point is to categorize your income between 'secure' and 'unsecured' income streams. Secure income is state pension, defined benefit (or final salary pensions) and annuity income. Unsecured is any income that derives from investments, rental income etc. Next is to identify your living expenses and split that into fixed and discretionary. 

Fixed costs are those you have no control over, such as council tax, utility bills, insurances, food and other household bills. You will have more time on your hands, so you may consider holiday costs to be an essential living cost as well.

Included in discretionary spending will be gym membership or costs associated with hobbies, buying a new car, meals out and/or other entertaining plus presents for children and grandchildren.

Once you have identified your fixed costs, look to meet them from secure income, so your basic living costs are covered.   

Personal pensions, self-invested personal pensions, workplace pensions and other money purchase schemes provide more flexibility in how you take 'income' withdrawals. These are ideal for sourcing your discretionary income, but once again the choices are many.

Identifying what is best for you is determined by your own specific needs and circumstances and are best decided upon only after you've discussed situation with a pension specialist.

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