Can I Afford Retirement? – How An Accountant Can Help

22 August 2022|Related :

When it comes time to retire, many hope to maintain the same standard of living they currently enjoy while working, if not better.

However, a poll by Scottish Widows found that 18% of workers expected to have to work into their mid-60s out of necessity, 24% of respondents expected to be in a position to retire when they hit the age of 65, while 39% feared running out of money in retirement.

Unfortunately, without proper retirement planning and preparation in place, you could fall short and end up disappointed, or even vulnerable, should you have an insufficient pension.

In this guide, we’ll be explaining all you need to know about how an accountant can help you plan your retirement, so you can relax and step away from demanding schedules, obligations and deadlines.

Planning Your Exit Strategy with an Accountant

If you’re an owner of a business, one of the first things to consider is your exit strategy. 

You’ll need to decide if you plan to withdraw from the business, sell it or leave it for the next generation. 

If you intend to hand over the business, you’ll need a succession plan in place, something which an accountant can help you with. They can assist with valuing your business, including all of its assets, and finding a suitable buyer to take over.

At Ryans Chartered Accountants, we can do all of this as well as managing all of the tax implications at the timing of disposal.

Planning Your Pension Provision with an Accountant

When it comes to planning your pension, it’s important to know that there is more than just one type of pension plan.

The three main types of pension are: 

Defined Contribution Pension

This is sometimes known as a ‘money purchase’ pension, or a pension pot and is one of the most common types of pension schemes.

They are often set up either by yourself or arranged by your employer through a workplace pension scheme.

You or your employer then pay money over time into the pot and this money is invested by the pension provider.

The size of your pension at retirement depends on how much was paid in and how well your investments have done.

Defined Benefit Pension

This type of scheme is declining in popularity. It is typically arranged by your employer and is sometimes called a ‘final salary’ or ‘career average’ pension.

Defined benefit schemes provide you with a guaranteed annual pension worth a certain amount at the end. The value of your pension depends on your earnings, how long you’ve worked for your employer and the terms of the pension scheme.

State Pension

The State Pension is the pension you must claim from the government when you reach State Pension age.

The maximum you can get is £185.15 per week (£9,627.80 per year) and depends on your individual working history and your National Insurance (NI) contributions.

When it comes to planning your retirement, it is important to ask yourself the following questions:

  • Do you know which type of pension you have?
  • Are you providing adequate contributions?
  • Are you aware of all the pension possibilities for business owners/directors?

If you answered ‘no’ to any of these questions, don’t worry.

At Ryans, we can fully assess your circumstances and finances so you can be sure you have the right pension plan in place and adequate provisions.

This will involve budgeting, so you know how much you’ll need in retirement and whether you can afford to sustain your current (or ideal) lifestyle in retirement as it has been found that around 45% of workers are failing to save the recommended 12% of their salary towards retirement each year

We then look at the retirement income available to you such as investments. Please note, we don’t sell your investments, we simply offer guidance to help you understand what you’ve invested in and the tax implications involved.

Planning Your Life Assurance and Long-Term Care with an Accountant

Life assurance is essential financial protection for any family. This protects your dependents from financial difficulties in the event of your death and requires diligent consideration to make sure you select the right protection or investment policy for you. 

At Ryans, we assess all your circumstances and help to put the right measurements in place so you are prepared for long-term care and medical insurance for both yourself and your spouse in the future.

Let’s Talk

We provide solutions that are tailored to your specific needs to make sure you can enjoy your much deserved retirement after years of hard work. With expert advice offered in easy-to-understand terms, your journey to retirement will become a lot easier.

For more information, please don’t hesitate to get in touch with our team who will be happy to help and answer any questions you might have!

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