5 Ways to Ensure Your Retirement Fund is As Efficient as Possible

When approaching retirement, it can be challenging to ensure you have the most optimal retirement fund by the time you need it.

With so much to consider when building your wealth for retirement, you need some effective steps in place to ensure you achieve the most successful financial outcome.

In this article, we’ve put together five of the best ways to ensure your retirement fund is as efficient as possible.

Read on to find out more.

1. Seek a wealth management service

One of the most important things you can do to build the most efficient retirement fund is to first seek the professional guidance of a wealth management service.

These expert financial advisers will give you unique and beneficial guidance, whether you already have an idea of how you want to approach building your retirement fund, or you’re looking to learn the first step.

Your advisers will discuss all of your options with you, taking into account your specific financial circumstances, and help you take the right approach that’s best suited to growing your wealth for retirement.

• Create and execute a financial plan

With the guidance of your financial adviser, one of the first steps you’re likely to take is to build a financial plan.

Your expert financial planners will help you establish all the goals you have for retirement, which can include such things as – retiring at a certain age, living a particular retirement lifestyle, and how much you may want to share with loved ones.

These goals are crucial for helping you determine how much you need to build for your retirement fund, and they will give you and your adviser a solid foundation on which to devise your plan for reaching these targets.

Also, your adviser will be sure to factor in every aspect of your finances, to help you create achievable goals and effective steps that are best suited to growing your wealth for retirement.

• Optimize the structure of your pension contributions

Another way to help you build a more efficient retirement fund is to optimize how you structure your pension contributions.

Your adviser will help create a clear plan of what contributions you need to make, and how often, in order to build the best retirement fund that aligns with your financial goals.

They’ll also take into account all the tax charges on your contributions, and help you structure them in a way that shelters as much of your money from tax as possible. This is likely to factor in:

The lifetime allowance (how much of a pension fund you can build up over your life) – £1,073,100 (as of the tax year 2022/2023)

The annual allowance (the maximum amount you can pay into a pension each year) – £40,000 (as of the tax year 2022/2023)

This way, you’ll be growing your retirement fund in the most efficient way possible, and building more wealth resilience.

• Don’t underestimate the length of your retirement

It’s also important that you don’t underestimate the length of your retirement. Often, people retire with what they think is a sufficient retirement fund, but due to them living longer than expected, they realize it is an inadequate amount.

As of the current tax year, you can access your pension as early as 55 – depending on your pension scheme’s rules. The current life expectancy in the UK is 79 years for males, and 83 years for females, with more and more living into their 90s.

Therefore, this leaves a 24-year retirement minimum if you claim your pension as early as possible, and live to the average expectancy – but it could be much longer.

This scenario simply highlights the importance of not underestimating your retirement length and ensuring you’ve built your wealth sufficiently to accommodate for it.

• Considerongoing advice from your wealth manager

Another great way to ensure your retirement fund is at optimal efficiency is to consider receiving ongoing advice from your financial advisers.

When approaching your retirement, there’s a wide range of factors that can impact your financial circumstances, and therefore your plan for building your retirement fund.

With ongoing advice, you may be better prepared for any scenarios which might impact your wealth, and make sure you’re building your retirement fund in a way that’s best suited to reaching your goals.

—

With these five essential steps in place, you can be well-placed to build the most efficient retirement fund, and grow your wealth optimally for when you choose to retire.

—

Please note, the value of your investments can go down as well as up.