Living the last portion of your life on state pension has been a given for quite a while. However, what has also been a given for a while is that you are likely not to get enough when you retire. There are sketches, jokes and serious criticisms here and there about retired people facing financial trouble and not being able to keep the same lifestyle as when they belonged to the active working force. Even in prospere countries like the UK this seems to be the case, more than many people think. Britons find themselves short in money for what they want and the hundred-and-something pounds a week they get isn’t enough to cover their intended expenses.
So more and more people have started to look for options that complement their state pension income when they retire. As in any other financial scheme, planning ahead is a big part of success, just as much as making the right decisions. Young or middle age people rarely think about their retirement finances as a major concern, but we strongly believe that they should prepare in advance, because the sooner they start, the better chances they have to built a good financial scheme that will help them be at economic ease when they reach the elderly age.
There are so many options for financial strategy and so many aspects that need consideration, that it isn’t advisable to research and design a plan by yourself. Even if general knowledge on the differnt schemes, like long term bank investments, properties, personal businesses and the stock market can give you a somere idea on how each one works, the reality is so complex that you should get professional counsel while you are in the process of making these decisions. If you don’t you might miss great opportunities for you, and you might as well make huge mistakes and put your money and effort in a place that won’t pay off in the long term. And when it comes to retirement planning, it’s all about long term.
Tax planning is a big part of retirement planning, because different schemes have their own particulars in regards to tax liabilities. Some forms of income are tax free while others are tax deductible, and sometimes you have both ways to access the same money or the same savings, you just need to know your most convenient option. Also, tax rates change from time to time in response to new tax regulations, so in order to get the better rates of tax you must stay up to date with this particular issue. Or instead, just hire a consultant who does.
Running the right tax strategies for a comfortable retirement is a complex science, but if you do it right you will make a huge difference in your personal finances by the last stage of your life.
Equity release is a scheme that has proven to be an effective way to financialy boost a retiree’s life. Unlike other strategies like funds, long term investments and tax planning, you can release the equity of your property without planning ahead and still get a great deal. Released lump sums or incomes are often tax free and are calculated on factors like your age and property values, so there isn’t much you can do at a younger age to ensure a better equity release deal.
Instead, making the most out of equity release is about finding the best lender with the most convenient rates, that is also reliable and has no fine print in its offerings. Since now this sort of lenders is more heavily regulated by the Government, you are unlikely to be scammed or lose money in the process.
You can hire an advisor to tell you about which scheme is best for you, and to show you the best rates in the market. However, you can also shop around in the Internet and compare rates. Don’t do the second thing only, because there are mischievous websites here and there, but sitting down a couple afternoons and checking some offerings will give you an idea on what kind of rates you can expect for your property. Equity release calculators are a great help for this. There are free equity release calculators all over the place online.
Equity Entrepreneur is another great online resource. If you check their blog, you will find very useful articles on equity release and the latest news, as well as reliable information on equity release rates and schemes.
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