Your retirement timeline

Whether you're fast approaching retirement or are still many years away, there's always something you can do – or think about – to help improve your chances of enjoying the kind of lifestyle you'd want for yourself...

Many people aren't sure what they could do and when best to do it. Using our timeline may provide you with some helpful pointers.

The timeline suggests things you may want to consider – or actions you might need to take – at different stages along the ‘countdown' to finishing work.

About 40 years to go

If you're in your twenties, retirement might seem like it's a lifetime away. But here's something to think about.

Remember when the iPod first came out. Doesn't seem long ago, does it?

That was 2001..

We don't want to depress you – but it's probably only about three times that long until you'll be retired!

What to do now

  • Begin by thinking about the kind of retirement you'd want for yourself:
    • Where would you like to live?
    • Do you think you'll want to travel?
    • What sort of activities and hobbies do you think you'll enjoy?
    • Will you be financially supporting anyone else?
  • Start to consider how you'll fund your retirement
  • Make a retirement plan
    • Set yourself some goals – think about what age you want to retire, how much income you want, whether you'll do any part-time work.
    • Think about how much you might need to save.
    • Also consider how much you can afford to save now.
    • Remember, even if you think you can't afford to save much, as little as £50 or £100 per month will help build your retirement fund.
    • Return to your plan regularly to check on your progress.

I wish I'd thought ahead a bit more 40 years ago

"Don't get me wrong, I'm really enjoying my retirement and I know I'm luckier than most. But sometimes I get to thinking that if I'd just put a bit more by a few years ago, I'd be a lot better off now. A few pounds a week, maybe, into a pension plan. I wouldn't have missed it when I was working, would I?"

(This is not a real person, created to highlight the benefits of saving)

Little by little

Saving even as little as £50 a month into a pension could add up to a substantial amount over time, as shown below.

£50 per month for 10 years.

The value in today's money of the investment might be = £6,680

Amount paid in = £6,000.

Possible increase to the investment = £680

£50 per month for 20 years.

The value in today's money of the investment might be = £16,000

Amount paid in = £12,000.

Possible increase to the investment = £4,000

£50 per month for 40 years.

The value in today's money of the investment might be = £43,700

Amount paid in = £24,000.

Possible increase to the investment = £19,700

Assumptions

The total amounts shown take account of inflation at 2.5% each year and show the buying power of your pension in today's money. We've assumed a total charge of 0.75% a year and an annual growth rate of 2.4%.

Please remember this is not representative of investments in a specific pension and what actually happens may vary considerably. The future pension fund value may be significantly different from the amounts shown.

The amount saved remains the same and no withdrawals are taken from the fund.

These figures are a guide only and are not guaranteed. The value of any investment into a pension in today's money will depend on factors including the funds chosen, actual growth rates achieved, the level of contributions made, the charges applied, the actual inflation rate and your chosen retirement age.

This is not a personal illustration.

About 20 years to go

If you're aged 35 to 45, you're likely to have plenty to think about already. Your career, your home, your family... busy times.

You've probably also thought about the need to provide for your retirement. You may have a private pension, perhaps arranged through your work.

At the moment, retirement planning is more likely to be at the back of your mind than the front. But this is the stage in life when many people could benefit from taking a brief ‘time out' to make sure their retirement plans are on track.

What to do now

  • Contact your existing pension provider(s) to find out what your pension fund(s) are worth.
  • Understand whether you're on schedule to achieve the kind of income you're looking for when you retire.
  • Review your retirement plan and see if you need to change anything.
  • Look at all your financial arrangements together.
    • Your pension is just one of the ways in which you can provide for your retirement. To get the full picture, think about things such as the value of your property and any savings accounts you may have – as well as outgoings such as your mortgage or other loans.

About 10 years to go

Even if you've kept a careful eye on your retirement planning, this is the time when it pays to do some serious thinking about the decisions you'll need to make. If you're around the age of 55, you've probably heard about the Government's changes to pension rules and maybe thought about how they might affect you.

Watch a video on your choices from the age of 55.

Video transcript

From April 2015, savers will have complete freedom to access cash from their pension funds

If you’re 55 or older, you’ll have four choices

One - withdraw all your pension money immediately and spend it on whatever you want

Two - take some of the money, as and when you need it

Three - use it to buy yourself an income for your lifetime

Or four simply leave the money where it is. You can make your choices later.

You’ve got to think about the taxman too. You can only take 25% of your pension fund tax free. The rest will count as part of your annual income, which you’ll be taxed on at your marginal rate.

As tempting as it might be to withdraw all of your pension fund now, you need to think carefully about how much you’ll need to live on. Once you’ve made a decision, you may have to stick with it.

But that doesn’t have to mean you take nothing from your fund. You might want to take some cash to do some home improvements, or take a holiday.

Or you might find you could save money by taking a cash lump sum to put towards paying off any debts.

Whatever you decide to do, it’s worth giving some thought to your plans for your pension fund right now.

Otherwise, when the time comes to finally put your retirement plans into action, the wheels might come off.

What to do now

About 5 years to go

Even with just five years to go before you're due to retire, it's not too late to make important changes which could help you enjoy a better retirement. This is a good time to start thinking seriously about how long your money may need to last you – many people underestimate how long they may be retired.

What to do now

  • Contact your existing pension provider(s) to find out what your pension fund(s) are worth.
  • Think about how much you'll need to live on when you're retired
  • Review your plans and consider if you'll have enough income
  • Your savings and investments are important as well as your pension
    • Making the most of your £15,000 a year (for the 2014/2015 tax year) ISA allowance could help you to save more tax-efficiently. This increases to £15,240 in the 2015/2016 tax year. Read about Aviva's ISA
  • Find out what you'll be entitled to receive and when from the state
  • Think carefully about how long your money may need to last
  • Consider how to provide for your loved ones
    • No-one likes to think about dying, but you can enjoy greater peace of mind if you know your loved ones will be provided for by making a will.
    • If you're buying an income from your pension fund, you need to know whether anything would be paid to your dependants when you're gone. What happens to my money when I die.

Less than a year to go

Now's the time to collect your thoughts on decisions such as whether to take a cash lump sum from your pension. There's a lot to think about:

What to do now

  • Make sure you can afford to retire on the date you've chosen
  • Decide how much you’ll need to live on
    • You’ll need to have a clear idea of your regular outgoings, as well as thinking about paying for life’s little luxuries. We can help you take control of your budgeting
  • Find out about taking cash from your pension
  • Read the information your pension provider sends you
    • You’ll receive statements showing how much your pension is worth, together with your options for taking cash from your fund and/or using it to buy an income. This will normally be sent to you six months before your retirement date, with a further reminder of your options two months before you’re due to retire.
  • Check how much you’ll get from the state
    • Your retirement date may not, of course, be at the age when you become eligible for the State Pension. But you should make sure you know how much you’ll get from this and any other benefits you might be able to claim. What benefits am I entitled to.
  • Consider how to provide for your loved ones
    • No-one likes to think about dying, but you can enjoy greater peace of mind if you know your loved ones will be provided for by making a will.
    • If you're buying an income from your pension fund, you need to know whether anything would be paid to your dependants when you're gone. What happens to my money when I die.

If you're new to us, go to our Aviva Pension to find out more about starting a pension

Call us now for more information

If you’re new to Aviva

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Or if you’re already a customer

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Lines are open Monday to Friday, 9am-5pm.

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Find out how we can help you when you call our team.

If you need some help or information from Aviva, please call us on one of the numbers above. We can help you with:

  • Using our website
  • All the facts about Aviva products and services
  • More details on the options you can choose from when you’re making decisions about your retirement
  • Information on where to find financial advice
    • Although we can’t give you advice, we can put you in touch with an adviser who can talk to you about which financial products or investments may be right for you.
    • Alternatively, you can visit www.unbiased.co.uk to find an adviser in your area.

If we can help you in any of these ways

call us on 0800 285 1088.

Monday to Friday, 8.00am-6.30pm, Saturday 9am-12.00pm

Calls from UK landlines and mobiles are free.

For our joint protection, telephone calls may be recorded and/or monitored.

If you require financial advice, we can put you in touch with an adviser who can talk to you about which financial products or investments may be right for you. Alternatively, you can visit www.unbiased.co.uk to find an adviser in your area.

Pension Wise

Pension Wise is a free and impartial service set up by the government for people retiring with defined contribution pensions. It will help you understand what your choices are and how they work.

You'll be able to get help on the Pension Wise website, over the phone or face to face about:

  • what you can do with your pension pot
  • the different pension types and how they work
  • tax you pay on your pension.

If you're not sure about your options at retirement you should seek appropriate guidance or advice.

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