It is never too early to start planning for retirement. Having a pension is an excellent perk of your job, but it also raises several questions as you prepare for retirement, such as:
- What is the value of my pension?
- What is a final salary pension?
- Can I transfer my final salary pension?
- Can I transfer my pension to another person?
- What are the pension beneficiary rules?
- Who can help me make the most of my pension and retirement?
Delve into the answers to these questions to better prepare for retirement and get your questions about your pension answered.
What is the Value of My Pension?
Of course, you know the value of your pension based on agreed-upon terms with your employer. However, did you know that you can figure out the Cash Equivalent Transfer Value of your pension if you decide to transfer it? You can easily find a pension transfer value calculator online with a quick search.
Once you select which pension transfer value calculator you’d like to use, you’ll enter how much your annual pension income will be once you retire and the age you plan to retire. The pension transfer value calculator will then give you a range of your potential pension transfer value so that you can compare it to the amount provided by the pension itself and make an educated decision to transfer or not.
What is a Final Salary Pension?
According to Unbiased, a final salary pension is a pension that guarantees your annual income for life-based on the amount of salary you earn at the end of your career. A traditional pension builds up over time, but a final salary pension can be more beneficial because it is generally an above-average amount.
Can I Transfer My Final Salary Pension?
You can transfer your final salary pension. Some of the benefits of transferring your final salary pension include:
If you release your entire final salary pension as a lump sum, part of it will be released tax-free.
If you transfer your final salary pension, you have the freedom to invest it the way you want.
By transferring your money, you have the option to use it - or not - however and whenever you want.
Planning Your Will
As you approach retirement, you’re probably also thinking about your will. If you transfer your final salary pension, you can ensure that money will be given to the people you want it to after your death. This could include your spouse, relatives, children, grandchildren, friends, donations, or causes you care about.
Can I Transfer My Pension to Another Person?
Technically, you can transfer your pension to another person, but it is not always recommended unless it is necessary. This is because your pension is the financial support that will provide for you for the rest of your life. Transferring it to someone else can put your future in jeopardy.
It is more common to set up a family member to inherit your pension after your death, as mentioned in the section above.
What Are the Pension Beneficiary Rules?
Pension Benefit Guaranty Corporation outlines the process of designating a beneficiary to inherit your pension. You need to name the person or persons you would like to receive your pension payments in the event of your death on your pension paperwork.
Depending on the type of pension plan you selected, your beneficiary will receive their payments in the same way, whether that is a lump sum or set payments over months or years.
Who Can Help Me Make the Most of My Pension and Retirement?
Because the process of receiving your pension, transferring your final salary pension, and naming a beneficiary can be complicated, you should consult with an expert to help you ensure you’re making the right choices and your pension transfer options. You worked hard to earn this money, so you want to make sure you make the most of it. Resources and experts that you can hire to help you include:
- Pension transfer services
- Developing a personal pension plan
- Pension planning consultants
- Pension investment advisors
- Financial advisor specializing in retirement
- Pension planning services
- Pension review services
- Final salary pension transfer specialist
These specialists, consultants, and services work hard, so you don’t have to. They possess expert knowledge and information that can help you make informed decisions to stay stable and comfortable well into retirement.
Pensions seem complicated, but they don’t have to be. Get the support you need from financial advisors for retirement specialists who will help you evaluate your options and answer any questions you may have. Ultimately, you are in charge of your finances and have the power to control what you want to do with your pension after you retire and beyond to best support you and your family.