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Pensions for Business Owners
1. Why Act Now?
Rising life expectancy has put pressure on retirement planning, highlighting the real danger that you might outlive your savings. By taking action early on, there is a greater chance you will be able to adequately fund retirement.
1.1 Decide how much you need to save to live comfortably in retirement.
- Identify your ideal annual income using a pension calculator (see 6.1) and work out what you need to save to achieve that.
- Allow for inflation when working out targets.
- For example, a 40-year-old aiming for an annual retirement income of £30,000, retiring at age 60, would need to multiply £30,000 by 25 (£750,000).
1.2 The earlier you start, the less expensive it is to save.
- A 50-year-old who starts saving for their retirement at the same time as a 40-year-old, may need to save nearly three times as much every month to secure the same level of pension saving.
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