We spend so much of our lives working. Whether you are on the 9-5 grind, working shifts or perhaps enjoying the freelance life, our careers help us to fund our lifestyles. They also allow us to plan for the future, putting some money away for when we finish our work lives. With the state pension age going up, you might have been paying into your own private pension as well. The question is, how much should you be putting away for retirement and how can you access that cash? If you are asking the question of when can I withdraw my private pension, let’s delve into the answers.
What Is The Age For State Pensions?
The age for claiming your state pension depends on when you were born. Obviously you need to have qualifying years of paying National Insurance in order to claim your pension. You can read more about this here. However, checking when your state pension will be payable is simple. Head to the Government website and type in your date of birth. This will give you an age at which you will be able to get your hands on that money.
How Much Should I Save For Retirement?
How much you will need during retirement depends on the individual. We all have different lifestyles and things we want to do during our ‘twilight’ years. With everyone being on different incomes, living in different parts of the country and having specific personal circumstances, things will differ. Experts state that you should be able to maintain a comfortable lifestyle if you have a pension income between half and two-thirds of your final working salary. Let’s say you finish work at the age of 68 and have 20 years after that. If you were on a salary of £25,000 a year, you’d need anywhere between £12,500 & £16,650 a year. The lower end of that would equate to £250,000 over the 20 years. With the basic state pension being £8,814 at the time of writing this, you can see that there is a gap to potentially fill.
The sooner you start saving into a pension will mean that you can maintain lower monthly payments. The general idea is that you save half of your age as a percentage. So the earlier you begin, the lower your percentage will be. If you start at the age of 20, you’re percentage would be 10%. Start later in life at 35 and you’d be looking at 17.5%. Your money needs time to grow so the later you leave it the more you will need to put away.
Paying Into A Private Pension Pot
There are a number of different ways to start a private pension. If you are employed you should be able to do this via work, with contributions added by your employer too. For those who are self employed, freelance or simply want a pension away from the company they work for, there are lots of options. After much research, I decided to open my private pension with Penfold. If you like the sound of them, use my link and once you make your first deposit we’ll both get £25. I love the fact they offer an ethically sustainable plan which meets my morales. Take a look and see if it works for you.
When Can I Withdraw My Private Pension?
The big question is when can I withdraw my private pension? This might vary from pension company to pension company, however, generally you will be able to access your private pension at the age of 55.
When you consider that the state pension age is rising and might even reach the age of 70 for some of us, having access to your money all those years earlier is important. It can free you up to lower the number of hours you work as you get older. It can help you support family members in their lives and also give you some money to travel the world.
Final Thoughts
Whilst things are financially tight in the world at the moment, we must focus on our situation in the here and now. However, long term thoughts also need to be considered and your pension is something that you should be thinking about.
