3 Proven Options For Successful Retirement

The glossy retirement dreams that many of us have can certainly be achieved - with a bit of planning and focus

. Retirement should be near the forefront of the mind of anyone who wants to create a fantastic life for themselves in the future. It takes certain amount of specific knowledge, however. To that end, let's look at the options that savvy professionals are using in order to retire successfully.

- Employer and personal pensions: Pensions are considered to be the stalwart option to creating a safe retirement plan. A pension is essentially capital that you can claim after you have reached retirement age. You pay money into your pension each month and when you retire, you essentially 'cash in' on your pension.

Employer pensions work in a specific way: your employer will also contribute to your pension as long as you put some of your wage into the pension. The benefits of employer pensions are that they are turn-key features for retirement; you don't have to think about it too much because the pension contribution from you is deducted from your wage slips.

Personal pensions suit investors who want to have a focused approach to managing their money. You contribute to your personal pension with as much money that you want to pay in each month. The advantage of these personal pensions is you can see where your money is going because you have control over how much you pay.

- ISAs: Individual Savings Accounts, more commonly referred to as ISAs, are popular choices amongst people saving for retirement. They come in two types: cash and stocks & shares ISAs. Each tax year which starts in April, the government will allot a specific amount of cash that can be saved tax-free for cash and stock & shares ISAs.

Taking advantage of this tax-free wrapper is crucial to build a retirement nest-egg for a soft landing when you retire. Cash ISAs are perfect for people who want to be liquid and prefer to know that their cash is in a bank account.

Stocks & shares ISAs are different in that you have to hold a certain amount of cash that will then be invested by the financial institution that you have chosen. This ISA type is popular because it runs for set amount of time, usually a minimum of 5 years. ISAs have investment options that you can choose from such as fixed-term investments.

- Funds: These products are what the City of London is famous for. Funds are run by fund managers, and these managers pool investors money to invest in shares of companies or bonds in a wide range of industries. Funds are an affordable way to invest because some funds only require a minimum of 500-1,000 and if the fund makes money that year, you receive your money back with profit. The caveat to remember with funds is you are risking your money if the fund does not perform well. Only invest money that you could potentially afford to lose.

Top tip: Always check the current thresholds of cash that is protected in a bank account if you keep retirement savings liquid. The Financial Services Compensation Scheme will cover savings deposits of up to 85,000 per person at each bank. This threshold is subject to change at any time.

by: gerald s Lawrence

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