Pension Withdrawals, Make Sure You Don’t Run Out

If you are withdrawing money from your pension, how can you plan so that you have enough left when you need it? The Express has some suggestions.

1. Talk to a Pro

  • It’s a bit like if you were trying to fix your car but didn’t know much about engines; you’d get a mechanic’s advice. An independent financial adviser is that expert for your money.
  • They’ll guide you on where to put your money and how much to take out so you don’t run short.

2. Timing is Everything

  • Just because you can start using your pension money from 55 doesn’t mean you should.
  • It’s a bit like seeing a cake in the fridge. Just because it’s there doesn’t mean you should eat it now. Maybe you have other snacks (like another pension, some savings, or a job) to tide you over for a while.

3. Don’t Get Too Spend-Happy

  • It’s exciting to have access to money, and you might want to treat yourself. But if you spend big early on, you might not have enough for later.
  • Plan how much you’ll need and try to stick to it.

4. Watch Out for Taxes

  • If you take out large sums from your pension, you might end up paying more tax.
  • Talking to a financial adviser can help you figure out the best times to withdraw money to keep taxes low.

5. Keep Tabs on Costs

  • Just like you might shop around for the best prices, it’s essential to see how much your pension provider is charging you.
  • Costs like managing your money can add up, so make sure you’re not paying over the odds.

6. Watch the Money Markets

  • The value of your investments can go up and down like a roller coaster. If things are looking rocky, it might affect your pension pot.
  • An adviser can guide you through these ups and downs and may suggest switching things up or holding off on taking money out.

7. Check-in Regularly

  • What’s right for you when you first retire might not suit you later on.
  • As you age, you might decide you’d rather have a guaranteed amount coming in regularly (an annuity) rather than dipping into your pot now and then.
  • Keep asking yourself if you’re happy with how things are going, and remember, you have the control to change things up if needed.

In short, it’s all about planning, being smart with your spending, and getting good advice. It’s your money, after all, and the aim is to make it last as long as possible during your retirement.