When you’re first starting your career, retirement is probably the furthest thing from your mind. And throughout your lifetime, other things might take financial priority. But you should ensure you’ve carefully planned for your retirement and are building a robust pension pot, no matter your age.
This does not constitute advice and advice should be sought in all instances before acting on it.
Starting out
It might not seem like it, but your 20s are the start of your financial journey, and an important time to start pension planning because the investments you make in the early days of your career have the most growth potential.
If you are an employed medical or dental professional, you’re likely eligible for automatic enrolment and your employer will begin to make pension contributions on your half. That’s usually just the minimum, so if you can afford to contribute more, go for it. If you are self-employed then you can set up a pension fund with the help of your financial adviser.
Gaining momentum
By the time you hit your 30s, you’ll most likely have additional financial responsibilities to consider, like children or a mortgage. While it’s easy to let pension savings fall by the wayside as other things take priority, you shouldn’t let your contributions slip.
If your salary increases, so should your contributions. And don’t forget to check your investment strategy. As retirement is still far off, you can afford a higher risk approach as long as you’re comfortable with the level of risk.
Staying on track
Chances are, your salary will start to peak in your 40s so it’s the perfect time for pension accumulation. By now you’ll have a good idea of how much income you’ll need to sustain your lifestyle so you can plan retirement better. This will help you gauge whether or not your contributions have been sufficient. If they haven’t, now is the time to increase them.
Hit the throttle
Your 50s is when you need to make up for any lost time. In addition to your regular contributions, consider adding one-off lump sums to help you reach your goals. You’ll have to start checking against annual allowance thresholds so you don’t exceed them. If you are an NHS employee, you will receive an annual statement You can also check your Lifetime Allowance and if you’re approaching your maximum, seek professional advice about how to handle the situation.
Approaching the finish line
Often, when doctors and dentists hit their 60s, they elect a lower-risk investment strategy for their pension savings. The reason for this is because it reduces fluctuations in value, and having expected returns can make planning for retirement easier, even though it might limit the potential growth of some investments.
At this point, you’ll want to figure out how you will access your pension when the time comes. Will you take one lump sum or several? Will you receive a regular income? There are pros and cons for each option, so you’ll need to decide which one is right for you.
Advice at any age
It’s easy to get swept up in everyday life – work, family, hobbies, – but don’t forget to prioritise retirement planning. Your pension and financial affairs will make or break your retirement lifestyle, so get in touch with us today to ensure you get and stay on track.
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Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.