The ‘baby boom’ took place between 1945 and about 1960 (approximately) and the boomers will be approaching retirement shortly. If you’re a boomer and you have no (or very little) pension in place, what should you be doing?
Having established how much you are currently entitled to, and what additional assistance the government might be offering its important to establish what you can get for additional savings and investments that you do now.
To get an idea of your investment to benefit ratio, go to the pension calculator and put in your actual details except for the following questions:
- ‘Do you want your pension to keep pace with inflation?’ click ‘Yes’
- ‘Do you want to provide a pension for your spouse or partner?’ click ‘Yes’ if you have a spouse and ‘No’ otherwise
- ‘Do you have an existing pension?’ click ‘No’
- ‘Take the maximum lump sum allowed (25% of your fund)?’ click ‘No’
- ‘New or additional monthly contributions’ type 100 in the Â£ box
This will show you how much weekly income you can expect for each Â£100 that you can invest every month, starting now. The younger you currently are, the larger this is likely to be.
I did an example for Ann, a woman age 50 with no spouse and came up with a weekly income of Â£22 per week for every Â£100 invested pcm.
The next thing to do, is to establish how much you can afford to save by creating a budget. You can get some help in this here and here, don’t forget to include your irregular expenses like insurance, Christmas presents and tv licence, and also anything else you might be saving for in the meantime. In particular you should ensure that this budget allows you to pay off your mortgage before you retire. Once you’ve got the figure you can afford to save multiply that by your weekly income amount calculated earlier and divide by 100 to get your additional predicted weekly income.
For Ann, if she could afford to save Â£150 per month that would give her an additional weekly income of 150 x 22 / 100 = Â£33.
This can then be added to all the predictions that you generated earlier to give you a total possible retirement income.
- baby boomer with no pension: tax and benefit implications
- baby boomer with no pension: options
- baby boomer with no pension: find out your current position