How long do you think your pension pot would last? What would happen if you outlive your pension pot? According to the last month’s budget, after reaching the age of 55, the individual gets access to his pension pot. The problem is that you cannot determine how long a person would live. You cannot get a closer or approximate value too.
Figure out how much you need
Plan how much you would be spending on your basic needs after your retirement. Remember that there would be a considerable amount of drop in the income and plan your fixed and variable cost. According to a study;
a) In general, a man is expected to live for 18 ½ years after reaching 65 and a woman is expected to live for 21 years after reaching 65.
b) In Scotland, it is 17 for men and 19 ½ for women
c) 18 years for men and 20 ½ for women in Wales
d) In London. its 19 years for men and 21 ½ for women
e) In East Asia side, its 19 years for men and 21 ½ for women
f) In Southeast Asia, men would live for 19 more years and women for 21 ½ years
This is according to a statistic report of April 2014. This might change and sometimes might not be even close to reality in your case. Each individual has a different lifestyle that affects the expectancy.
The survey tells you that you would live up to 85 and you happened to live till 101. You should be in a position to meet your own requirements. This can be assured with the help of allotting a considerable amount of pension for this error margin. While allocating the amount, remember that the cost of living would be very high in the future. On average, consider the inflation to be 2.5 pc.
Grow your pot
The need for money during the retirement would sometimes be more than when you were working. It is important to invest your money wisely. There are almost 320,000 people who are about to retire in this financial year. According to the new rules, if your pension pot is less than 30 thousand pounds, then you can take out your pension as cash. You can invest them in a right carrier to gain more income than it being idle in the pension pot. Remember that you might be requiring more money as you grow old, in terms of medical facilities, appliances and retirement home facilities.