07:58 05 October 2013
Working hard continuously for a long time can take its toll on the mind and the body, which why individuals who have been at it for quite some time start thinking of nothing but retirement.
However, retirement will be an event to look forward to only if you have done your homework on pension planning and have accrued enough or more than enough funds to bring you comfortably through your golden years.
These are some of the options to consider making retirement a welcome event rather than a dreadful one:
1. State Pension is the most common option which the majority of the working individuals have. Employee contributions deducted from the salary goes to the building up of the state pension plan. A retiree who has paid the full national contribution could receive a weekly stipend of £110.15. There is definitely a need to top up the basic State Pension Plan to enjoy a comfortable retirement life at the very least.
2. Defined Benefit Scheme - the employer sets aside a fund for its employees’ retirement wherein qualified members will be paid a pension equivalent to a predetermined amount for each year of employment. Unfortunately most companies have stopped this scheme due to high cost of maintenance.
3. Defined Contribution Scheme - the employee contributes an amount from his pay and the employer matches the contribution to build up a pension fund. The employee can get a lump sum of cash upon retirement, leaving the rest to become an annual income retirement.
4. Personal Pension Plans - the individual pays a certain amount to a fund manager who places the funds in various types of investments such as stocks, investments, and shares.
5. Individual Savings Account. It can come as a Stocks and Shares or Cash ISA and is becoming a preferred option for pension scheme because of its tax-free privilege.