Rising Cost Of Living, Will My Pension Be Enough?
The rising cost of living is a huge concern for many people, especially those who are retired or nearing retirement.
How inflation impacts your pension will depend on the type of pension you have.
Some retirees receive an income from a defined benefit pension, in this case you may not have to worry as much about inflation because the amount you receive is often linked in some way to inflation, usually CPI or RPI. While this increase may be capped it, should be a welcome increase that goes some way to reducing the impact of inflation.
If you're taking money out of an investment or a defined contribution pension plan and inflation is high, this is when you should evaluate your finances. You must consider if the amount you withdraw is sustainable in the long run. Naturally, investments go up and down in value over time and any well-designed withdrawal strategy should factor this in.
A customer may wish to hold a portion of their pension in lower risk assets. To prevent your assets from eroding, keep as much of it in a place where growth is capable of maintaining pace with inflation, and ensure it will last you the rest of your retirement. Financial advisers have the ability to explain what is and isn't sustainable so you can make an informed decision about your finances. It's possible that you're spending more than you should, or you are taking too much risk. There are things you could do to keep the fund accessible for longer.
Time to check your finances?
Yes, inflation is expected to increase in the future, so now is a good time to double-check your finances and make any necessary adjustments if anything changes. You can handle everything yourself, or talk to an adviser for a comprehensive understanding and direction.
Pension Advice with Schofield
With a financial plan, you can regain control of your money. Taking charge today may have a significant influence on your long-term financial well-being and retirement objectives.
Get in touch with our expert financial planners at Schofield to check that your retirement and pension plans are up to date and set up to combat inflation. Our cash flow planning tool will clearly show you whether you are on target to live the retirement you want.
Call us now on 01423 368000 or email us at email@example.com
The value of an investment with Schofield Money Ltd is directly tied to funds selected, as a result, the value can fall as well as rise, you may get back less than originally invested.
This article is for information purposes only. It does not constitute any financial or investment advice. Please contact us if you wish to proceed with any course of action suggested in this article.