Many working professionals change jobs several times during their career and leave pension benefits behind with former employers.
Over time, these pensions can be left there and forgotten about. The older pensions are therefore not aligned with your retirement goals and maybe invested in funds that may no longer suit your circumstances.
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Reviewing and managing your old pensions could help increase your retirement income and give you greater control over how your retirement savings are invested.
- Consolidate Multiple Pensions into One Place
It’s common for professionals to accumulate a few pensions throughout their working life.
Having pensions spread across different providers can make it difficult to:
- Monitor performance
- Review charges
- Keep your information up to date
- Understand what income you could receive at retirement
Bringing pensions together where appropriate can simplify retirement planning and make it easier to manage your overall pension strategy.
- Review Your Investment Strategy
Many old employer pension schemes were set up years ago and may still be invested in funds selected when you first joined the company. Your circumstances may have changed significantly since then.
A pension review allows you to assess whether your current investments still match:
- Your age
- Attitude to risk
- Become aware of all the new funds available for selection
- Retirement timeline
- Income objectives
Even small improvements in long-term investment performance can have a significant impact on retirement income over time. Visit this page to see why a pension review is so important.
- Reduce Unnecessary Pension Charges
Charges can vary considerably between pension arrangements.
Reviewing older pensions may identify opportunities to:
- Reduce annual management charges
- Access lower-cost investment options
- Improve transparency around fees
- Improve the performance of the fund
Lower charges mean more of your money remains invested for your retirement.
- Improve Your Retirement Options
Not all pension arrangements offer the same retirement benefits.
An old pension may limit your flexibility when it comes to:
- Taking tax-free cash
- Drawing retirement income
- Leaving benefits to family members
- Managing inheritance planning
Reviewing your pensions allows you to understand the options available and determine whether your current arrangements remain suitable for your retirement objectives.
- Avoid Losing Track of Valuable Pension Benefits
One of the biggest risks is simply forgetting about old pensions. Many people are surprised by how much pension wealth has accumulated in previous employment schemes.
Regular reviews help you:
- Understand the pension benefits
- Keep records up to date
- Understand projected retirement income
- Make informed decisions before retirement
Knowing exactly what you have can help you plan with greater confidence.
Final Thoughts
Your pensions from previous employment could represent a significant portion of your future retirement income.
Taking time to review them may help improve investment performance, reduce charges, simplify administration, and create a clearer retirement plan.
The sooner you understand what you have and how it fits into your overall retirement strategy, the more options you may have available.
If you have pensions from previous employers and would like help understanding your options, Guardian Wealth can help you review your arrangements and determine the most suitable next steps.
Important To Know
- The value of your Approved Retirement Fund (ARF) or Vested PRSA may fall as well as rise.
- Past performance is not a reliable guide to future performance of your funds.
- There is no guarantee that the accumulated retirement fund will provide any specific level of retirement income.
