Retirement Pension Plan

If you’re in the thick of a busy professional and personal life, thinking about your retirement pension plan may not seem like a high priority – particularly for those under 40. However, the quality of life you’ll lead once retired will be directly related to the amount of planning and provision you made earlier in your life, so this is a subject that it can never be too early to start thinking about. Your pension income is likely to come from one or more of several possible sources. There is the state pension scheme that is usually mandatory in terms of contributions. You may also have one or more occupational pensions from your present and past employers. Finally there are then the private pensions plans or PPPs that you may have taken out voluntarily - particularly if you are self-employed or the director of a company.

All of these options have their advantages and some disadvantages. Three of the key things that are usually worth thinking about right at the outset are how you can maximise the return on your pensions savings and investments, how to minimise your taxation liabilities and how to avoid or at least manage your risk exposure. There is no single answer to these questions. Your particular life circumstances will be unique to you and so too should your retirement pension plan be. What is best for a high-earner in their 50s may not necessarily be the optimum solution for a new graduate in their first job. Your retirement age is likely to arrive much faster than you may think possible when in your 20s or 30s. So don’t put off for too long that retirement pension plan or you may regret it later!

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Retirement Pension Plan Basics

• An individually tailored solution is almost always necessary. It is usually advisable to be sceptical of claims from any provider that their solution is 'best' unless they have performed a detailed assessment of your position;
• Pensions are complicated. Know your own limitations and if you do not have expertise in this area, it is usually a good idea to consult a specialist financial provider for assistance;.
• Some investment schemes occasionally sold under the banner of offering "opportunity for retirement income", offer in fact the very real risk of a reduction in value of your capital or perhaps its total loss. It could be a major mistake to invest in a high-risk scheme unless you have taken expert advice beforehand;
• Few people would be able to lead a comfortable life if their only source of retirement income was the state pension;
• The best-known providers may not necessarily offer the best private pensions schemes. There is no relationship between the glossies a company uses to advertise its pensions and the real-life performance of the schemes themselves.  Be prepared to take your time and shop around.