Retirement Planning: How To Build A Better Tomorrow

Published on
15th April 2024
Contributors
Chris Gawne
eurikah
Chris Poole
Astute Financial Management
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Introduction

Over the next few minutes, we'll use this article to guide you through the process of planning for retirement, helping you set achievable financial goals and create a roadmap for your future. Whether retirement is decades away or just around the corner, having a solid plan in place is essential for enjoying a fulfilling and financially secure retirement.

Why Retirement Planning Matters

Retirement often seems like a distant dream, and it's easy to put off planning for the future. However, 'time' is your biggest asset: the sooner you start planning, the better prepared you'll be to achieve your retirement goals.

Retirement planning isn't just about contributing to your pension, it's about envisioning the life you want to lead in retirement and reviewing your pension progress, to make sure you're always on track.

Why is it so important?

The latest government figures show that the average pension in retirement is worth around £190k1, providing around £7,500 a year in income. Studies from the Pension and Lifetime Savings Association (PLSA) state that the MINIMUM living standards in retirement, require an annual income of £14,4002.

Without adequate planning, millions of UK workers risk never being able to afford retirement.

Setting Retirement Goals

Success comes from solid foundations, for Retirement it's about setting a goal that motivates you and is achievable.

Think about where you want to live, what activities you want to pursue, and how much income you'll need to support your desired lifestyle. Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals will give you a clear roadmap to follow and keep you motivated along the way.

Meet Emily

Meet Emily, a 50-year-old nurse who is preparing for retirement. Emily dreams of traveling the world in retirement but is unsure if she'll have enough savings to make her dreams a reality. Emily decides she needs to set her Retirement Goals, to help her track progress:

S: I want to retire close to my family, on the south coast of England

M: I would like to retire with an annual income of £25,000

A: I would like to keep my annual income below a "safe withdrawal limit" of 4%

R: I will use my workplace pension and future contributions as my main source of income

T: I would like to retire my age 65

By setting SMART goals, Emily can review her current pension to see if it will provide the income that aligns with her retirement aspirations, if it doesn't Emily knows she can: adjust her target retirement age, increase her contributions or find a pension scheme provides better performance: so that can she can save towards her Retirement Goal without increasing her time nor contributions.

Creating a Plan

With your retirement goals in place, it's time to create a plan to achieve them.

1. Start by thinking about what you'll spend your money on in retirement. Common expenses include: Housing, Food, Transport, Holidays & Leisure, Clothing & Personal expenses along with Charitable Givings (including Birthday & Christmas presents)

2. Once you have your expenses, understand your target annual retirement income. For example, if you've estimated monthly costs, multiply that number by 12, this is the number we'll use to assess your Retirement progress.

3. Next, use a calculator (like our Retirement Planning Tool), to understand what contributions you might need to make, to achieve your retirement lifestyle.

Tip: At this point it's often good to play around with different scenarios, change the length of time and the amount you might contribute and find a comfortable balance between: duration, contributions and retirement lifestyle.

4. You have a goal, you have a plan now it's time to assess your current progress. Review your current pension scheme, you can use our Retirement Forecast tool as a starting point. Are you on track? If yes, you don't need to do anything! If not, you may want to consider a pension scheme like eurikah's that's helps optimize the performance of your pension, so you can achieve your Retirement Goal.

Key Takeaways

Remember: "it's about time." A little bit of work now, could transform your life tomorrow:

  1. Start Early: The earlier you start planning for retirement, the more time you'll have to save and prepare.
  2. Set SMART Goals: Be specific about what you want to achieve in retirement and set SMART goals to guide your actions.
  3. Understand your Target Pension Pot: Use the eurikah Pension Planner to help you understand how much income you need in retirement
  4. Review and Track Your Progress: Use a tool like our Retirement Forecaster to check if your pension might be on track to align with your Retirement Goals, if not, you may want to consider: increasing your retirement age, contributing more each month to your pension, or finding an alternative scheme like ours, that aims to optimize your performance, maximize your returns and make your dream retirement, a reality.

References

  1. ONS, 2022
  2. PLSA (2024)
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Frequently Asked Questions

Everything you need to know about the eurikah workplace pension.
Are you auto-enrolment compliant?
Yes. You can select your contribution basis (by qualifying earnings of by certification), set up a pay reference period, even set a postponement period if required.

Our team of pension experts are on hand to help you get set up and running quickly, automate cyclical re-enrolment and manage any opt-outs.
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Yes. If you're an individual investor interested in taking advantage of eurikah portfolios, please get in touch here.
What are the fees involved?
Each scheme is priced individually, depending on a range of requirements. If you'd like to discuss your specific needs please don't hesitate to get in touch here.
Is the eurikah pension safe?
In short, yes! We're set up, administered and regulated like any other pension scheme in the UK.

The eurikah pension scheme is administered by Astute Finanical Management (UK)Ltd, who are authorised and regulated by the Financial Conduct Authority.

Our scheme is also protected by the Financial Services Compensation Scheme.

Clients monies are held in segregated accounts via Tier 1 UK banks and client assets are also held in trust.

This is designed to ensure that should anything unforeseen happen, your cash, assets and financial future are never at risk.
Can we offer the eurikah pension alongside our existing scheme?
Absolutely. Setting up a scheme to run alongside your existing provider is quick and easy, we'll even come onsite or attend team meetings online to raise awareness of the eurikah pension and its potential benefits, to your employees.

It's then up to your employees if they want to opt-out of your current scheme and into eurikah. We can then integrate into your systems to make running the scheme simple, easy and fast.

Get in touch today and we can support you getting started!
Do you support additional tax-efficient savings, like Workplace ISAs?
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Is eurikah available as a 401(k) or to other non-UK based companies?
Yes, the eurikah pension scheme can be adminsitiered globally. If you would like to offer the eurikah pension to employees outside of the UK, please get in touch here.
Do you offer salary sacrifice?
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