Advice for Retiree

Archive for the month “April, 2013”

How to Plan a Rich Early-retirement?

Different people take retirement differently and plan their retirement on different stage of life. Planning a retirement needs proper attention and if someone plans out an early retirement, they must not mind putting some extra effort. One might wish to retire at 45 whereas most people mull on this issue after 55 or 60 years of age.

Under today’s economic growth, higher salaries and various investment choices have resulted into too many early retirements. It’s entirely your choice to retire at 40 or 60 years of age but retirement at both the stages are different to each other and have their pros and cons.

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At the age of 40, you might have several commitments to fulfil and moreover, you have lesser time for accumulating retirement savings. On the other hand, it will give you a chosen lifestyle.

Retirement at 60, in most cases, is obligatory under the policies laid out by most companies.

Here are few basics for early retirement and how you can make your retirement rich in financial terms.

Consider a retirement age: This is the first and foremost step in planning an early retirement, as you will get a fair idea on savings pattern.

Life expectancy: Estimate how many years you are going to live post retirement, though it may sound difficult but by doing so, you can have an idea on the size of corpus.

What retirement meant for you: Two different persons will want to enjoy their retirement in different ways. If one plans early retirement to pursue other dreams, other may choose it for the world tour. As living two entirely different dreams varies on expenditure, you will need to mull on retirement plans that are poles apart to each other.

Now you will have a complete idea on how much savings you are going to need in your retirement. Here are a few steps that will help you in retirement savings.

Start early: If you are planning an early retirement, no way you can afford to start savings latter. Make sure to start your action as soon as income starts flowing in. Ensure that your contributions are without any gap, as this may prove burdensome to re-start after a gap.

Start small: There is no need to invest once in a big chunk, you must start savings early, even if it means small contributions. Your small contributions will one day return into big pension pot.

Increase the size of investment: Starting small does not mean you should get stick with it forever. Your savings must be proportionate with the income; it means that when your income is up, contribution, too, should be higher. Make a goal and work accordingly.

Wise investments: While making investments, you must look to balance the risk and return factors. In the early years of working life, invest in equity and later modify it for balancing debt instruments.

Buy a house: A house gives stability to your life. Make sure to buy a house, does not matter whether it is small or big. It will also help you in the later years to withdraw equity in the form of equity release scheme from the house.

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An early retirement can offer a chosen lifestyle and help in pursuing your dreams, but to have a successful early retirement, you must chalk out plans and stick to it for the entire working life.


Lagging Behind in Pension Contribution? Equity release can be a Worthy Alternative

At the ripe age of 50, you are at the peak of your earnings and ten to fifteen years away from retirement. Almost all the major expenses probably are behind you or about to wind up. This is the time, when you should give a serious thought on your retirement plans. Do some number crunching and start making contributions vigorously, as if there is no another day.

Venturing into this age group means a final opportunity to plan out retirement. This decade is quite important in a person’s life. Once you go into 60, you will not have enough time for planning.

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Most mortgages will be nearing their end point or fall into affordable range. The workplace studies show that 50s is the highest point of career earning-wise.

Basically, people in 50s are divided into two major groups

  • The first group comprises of those people, who are evaluating their retirement plan to find out whether it is still working or not. You need to calculate everything and take a decision if aggressive contribution is needed.
  • They who put off from the retirement plans due to any reason fall into second group. As you have ventured into 50s, so there is a high chance that your liabilities are shortened. You should start a speedy recovery now.

If you fall into second group, you should be ready for some financial sacrifices to achieve set parameter for happy retirement.

By the age of 50 years, it’s expected that you have a fair idea on the comfortable retirement. At this age, several other commitments, apart from mortgage repayments, are most likely to have got fulfilled.

Consolidate small plans

You must have worked for several employer during all these years and most likely to have some smaller plans. Now you should consolidate all the plans, as you will get a clear picture on the savings.

It’s easier these days to transfer one retirement account into another, so if you have IRA or 401 (k) plans, request the concerned authorities to merge them together.

Equity release is an alternate retirement plan

If you are lagging behind in retirement savings and by no means can you play catch up with it, you can release equity to plan your retirement. Equity release scheme these days is an ideal option for them, who have been left behind in savings approach.

This plan has several prospects in your retirement years. The biggest advantages offered to you are right to retain ownership of your house and no requirement of monthly interest repayment.

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You can trust equity release for a happy retirement. New rules and regulations in place are efficient enough to safeguard your interests.

Amid Pension Rules’ Acceleration, Equity Release Remains a Driving Force

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According to a study published by European Insurance and Occupational Pensions Authority (EIOPA), the new Pan-Europe pension deficits calculation rules can bring £150 billion funds in UK. This fund will be used to meet targets of defined benefit pension schemes in the country.

In yet another announcement, Chancellor George Osborne has emphasised on the government’s commitment to speed up new and simple pension overtures. According to Osborne, critic-centred cap on social care cost is also set to introduce almost at the same time.

Single-tier pension plan and cap on social care cost is set to launch a year earlier

The UK government has decided to bring single-tier pension scheme a year earlier than the due date was announced previously. Talking benefits of this plan, Osborne has declared that single-tier pension plan will come into effect from 2016, it was set to launch, before, in 2017.

Cap on social care cost is also to be introduced at the same, though the cap has been reduced from £75,000 to £72,000.

Osborne was forthright in saying that one requires paying up £72,000 only once and state will bear the care cost of senior citizens for rest of life.

To level pension disparity, single-tier pension plan is set to introduce at £144 per week. The Chancellor was up-front with praises for this “generous” pension scheme and claimed it as a massive boost for retirees keen on retirement savings.

However, it’s to be seen how new pension plan and social care cap fares in future. For most retirees, accumulating huge sum of social care cost will be a challenge. But, certainly, it’s not end of the road for them, as equity release can help retirees recover from challenges and to pay up the care cost.

House of Lords committee suggests equity release as effective retirement solution

A House of Lords committee had a few weeks earlier, recommended equity release as an effective solution to sort out poverty issue from the life of pensioners. This committee has also suggested government to chalk out strategies and spread awareness, about equity release, amongst the citizens of UK. (News source:

With several virtues, equity release scheme offers UK citizens to withdraw equity from their houses in cash lump sum or as monthly income. Unlike other mortgage plans, equity release customers can retain the ownership right and live in the house for entire life span.

Equity release offers countless benefits to customers, one of the most interesting and beneficial facets of this scheme is that paying back equity release mortgage, prior to your death or decision to move out from house, does not amount to any penalties.

It’s because of such time and means tested benefits that equity release has constantly been up on the minds of retired citizens in UK. Equity release market is functioning with all the new hopes, acquired from the last year’s huge success, to parity the income gains in the life of retired UK citizens.

If You Have Missed the Bus, Trust Equity Release For an Exorbitant Lifestyle

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It is believed that retirement is full of fun and frolic but oftentimes this notion gets marred in the absence of enough amounts of cash. According to some recent studies, retirement savings are constantly on the decrease, more than half of the population do not have enough savings in the account to live a sumptuous and healthy retirement lifestyle. The same study reveals that major portion of retirement savings are likely to get finished into the early phase of retirement.

Now, you are in 40s and do not have abundance of money in your retirement account. There are not many working years left either, so that you can start savings with a fresh mind and new approach. Most probably, the small corpus of savings would be haunting you but you need to be calm and composed as they say, it’s never too late to mend the ways.

So, what are the options available with you?  

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Become abreast with all avenues of savings and come up with aggressive investment

Still there are many ways open to you, explore them. First of all, categorise your income and expenses and find out if you can reduce the expenses. Once it has been categorised, start investing aggressively and ensure that your investment is productive.

Trust on equity

At this stage, your properties can give much-needed respite to you. Equity release scheme has been topping the list of beneficial retirement plans. The money received after release of equity on home is tax-free and you have the freedom to invest the way you like to. In the recent times, interest rates have been lowered on most of the equity release schemes, so you can look for a cheap deal.

Minimise your consumption needs

It’s wise to think austerity, when you do not enjoy the freedom of cash. If you are planning to buy expensive items such as car or new homes, shun the idea and prefer to buy only essential goods.

Cover your life with health insurance

At this stage of your life, you need to cover yourself with health insurances. Get to know about government sponsored benefits and make full use of it.

Focus on creating savings

When you are in 40s, retirement plans may not benefit you much more. Pay heed on accumulation of wealth and create savings whenever and wherever you get a chance to.

If you are still young enough to contribute into retirement funds, must check in with your employer to know of various retirement schemes that they offer you.

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