We all know that it is important to have an annual review on our financial portfolio and retirement planning, but there are also other times when we should make an appointment with our financial adviser to review our retirement. These occur during major life events or changes.

After an increase – This is the easiest time to increase your retirement contributions. Before you make plans with your extra monthly income, you might consider using part of it towards an increase in pension contributions. We often plead poverty and always have an excuse not to increase our retirement contributions. Your pocket won’t feel the increase as it doesn’t affect your budget. 

After a bonus – This is the perfect time to supplement your retirement with a lump sum cash boost. It could significantly increase your pension pot over time as compound interest gets to work. 

Example: A cash boost of £10 000 could earn around £23 100 in compound interest alone over 20 years at 6% return. That’s an extra £33 100 in your pension pot. 

 

 

 

 

 

 

 

 

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Example: Monthly contributions of £42 (equivalent to £10 000 contributions over 20 years) earns £9 325 in compound interest. That is only £19 405 in your pension pot.
 
After a Promotion – As after an increase, a promotion allows you to invest more into your pension pot. Don’t forget about lifestyle creep. As we earn more income, we up our lifestyle. To maintain this new lifestyle into retirement, we also need to increase our pension pot contributions. 

After receiving an Inheritance – An inheritance could be game changer for your retirement. The cash boost could be the difference between a comfortable retirement and a luxury retirement.

If you become disabled - Hopefully you had disability cover and received a pay-out, and that you are still able to work. This extra cash could be invested in your retirement if you do not need the funds for medical care. If you didn’t have disability cover, you might consider upping your retirement contributions as you will need special care when you are retired which could be costly. 

Keep in mind that you might need to retire early because of your disability and your retirement plans need to be reviewed to cover the extra years.

These life occurrences could significantly boost your retirement pot if you seize the opportunities that they offer. Make sure to get plans in place before you receive the extra income and find ways to spend it. 

Chat to your financial adviser to incorporate these life events into your retirement planning. [email protected]

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.