Your circumstances when you were first enrolled into a workplace pension scheme, compared to what your life may look like when you actually reach retirement age, are likely to be extremely different. Your income, attitude to investment risk, living costs, and your required investment terms will change throughout your lifetime, and therefore so should your pension planning strategies.

Retirement may currently seem like a distant goal to young professionals. However, the earlier you plan, the more time you have to save and grow your pension fund for the future. Even if your current earnings are modest, contributing into a workplace pension scheme, especially if your employer has a contribution matching scheme, can be a great starting place. Young savers also have the advantage of time on their side and may benefit from a more high-risk approach due to their longer investment timeline.

Often, in your mid-career your earning potential increases, which is a great opportunity to up your pension contributions and take advantage of compound interest. You may wish to consider increasing workplace pension contributions alongside exploring other savings options, such as ISAs or SelfInvested Personal Pensions (SIPPs).

It is also wise to review and adjust your portfolio – at least annually – to ensure it remains aligned with your objectives and risk tolerance. As retirement approaches, diversification becomes more crucial, often gradually shifting towards more stable assets that provide steady returns and less volatility, such as bonds, dividend-paying stocks, or guaranteed income products.

Approaching retirement requires a thorough understanding of your pension plans to ensure these are optimised to provide an income you can rely on in retirement. You may wish to consolidate multiple pension plans for reduced fees and charges, shift from growth-focused investments to income-generating assets, or consider the purchase of an annuity, or other guaranteed income products.

Developing a withdrawal strategy will also help you manage your income and sustain living expenses in retirement which your adviser, together with the assistance of Cashflow Modelling, can assist you with.

In retirement, the focus shifts from accumulation to income generation. Establishing a steady, sustainable income stream that minimises your tax liabilities is key. Regularly reviewing your plans in retirement is also important to adapt to your changing needs and living costs.

Retirement planning should not be a ‘one-size-fits-all’ approach. By understanding your individual circumstances and adjusting your strategy accordingly, you can build your retirement income fund throughout your life that meets both your current needs and lifestyle, with a focus also on the future retirement you wish to achieve.

It is essential to take control of your pension planning and make informed decisions about your financial future, which a MacDonald Partnership Independent Financial Adviser would be happy to assist you and your family members with – at any stage of life. Get in touch on 01463 242242.