Planning for retirement - a checklist

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Understand what’s available to you in both parts of USS and which parts you’re in

With the Retirement Income Builder you build up a guaranteed income for when you retire. This is based on your salary and how long you’ve been a member. You’ll also get a cash lump sum (which is tax-free up to a certain limit) of three times your pension amount. All members join this part of USS automatically.

The Investment Builder allows you to save a bit extra on top of your retirement income. You’ll be in this part of the scheme if you earn over the salary threshold, choose to make additional contributions or have transferred other pension savings into USS since October 2016.

Useful resources:

  • If you’re not quite sure what part of the scheme you’re in, check your Annual Member Statement or log into My USS to find out.
  • Visit our scheme page to read more about what’s available to you in both parts of USS.
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Consider when you plan to retire or take your savings

You have options around when you retire and take your Retirement Income Builder benefits and when you take your Investment Builder savings if you have these – you don’t have to do the two together.

The scheme’s Normal Pension Age is age 65, but you can retire before or after this age. Or you can flexibly retire – as long as your employer agrees – and take up to 80% of your benefits if you reduce your hours and salary by at least 20%.

If you’ve left USS and are no longer paying in, late or flexible retirement won’t be available to you. You must take your Retirement Income Builder benefits by age 65 (the scheme’s Normal Pension Age).

More information:

  • Visit our retiring page for more information on early, late and flexible retirement.

If you have Investment Builder savings too

You don’t have to retire to take these – you can take them any time from age 55, independently from taking your retirement income from the Retirement Income Builder.

Your Target Retirement Age lets us know when you want to take your Investment Builder savings. It’s important to check this is up to date in My USS if we’re managing your investments for you, so we know when to switch your investments to lower risks funds as you approach retirement.

Visit My USS to check what Target Retirement Age we have for you. You can update this at any time if the age you want to take your savings changes.

More information:

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Think about the retirement lifestyle you want and how much income you’ll need to achieve it

Retirement is a big lifestyle change. You might stop working completely or you might slowly transition into retirement by continuing to work a little. Either way, it’s important to think about what you want to do to help you understand how much money you’ll need to achieve the future lifestyle you want.

It’ll be different for everyone – you may want to continue to work part-time, take up voluntary work or you may decide it’s time to simply relax or travel.

So how much you’ll need will depend on the type of lifestyle you want. Regular holidays abroad and plenty of hobbies may mean you’ll need a little more. But if you’re happy with less holidays and less spending then you might not need as much.

According to Which?, average retired couples spend around £27,000 a year. This covers all the basics, such as bills and food, as well as some luxuries like holidays to Europe, hobbies and eating out. This increases to £42,000 a year if you want things like long-haul trips and a new car.

Useful resources:

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Review how your spending habits might change it

You’ll spend your money and time in different ways as you move through retirement. Some costs might go up, such as holidays and hobbies, but others might go down like commuting to work and mortgage repayments.

There are a number of benefits from the government that could save you money too. Things like a winter fuel payment, savings on travel costs plus free prescriptions and eye tests could all bring some of your spending down.

Have a think about how your spending habits might change and where you might save money to work out how much you’ll need.

Useful resources:

  • Visit Age UK for the benefits you might have access to when you retire to understand where you might save.
  • Take a look at the Money Advice Service’s guide on saving money on household bills.
  • Use the Money Advice Service’s budget planner to help you plan your spending.
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Work out what you’ll get in retirement from your Retirement Income Builder benefits and your Investment Builder savings too if you have these

You can view the value of your benefits and savings in My USS or your latest Annual Member Statement.

Put these figures into our benefit illustrator to estimate what you could get at retirement.

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Find out how much you’ll get from your State Pension

Your retirement income doesn’t all have to come from your workplace pension, you might be eligible for a State Pension from the government too. Find out how much State Pension you could get and when you’ll get it on the Government’s website.

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Consider any other sources of income

You may have other sources of income such as savings with other pension providers, property or investments. Think about what you might get from these other sources and pull together a full picture of what you’ll get at retirement. Remember that any income may be subject to tax.

Useful resources:

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Think about how you might want to take your USS benefits and savings

You have options when it comes to taking your Retirement Income Builder benefits and your Investment Builder savings, if you have these.

With the Retirement Income Builder, alongside your retirement income, you can take as much or as little tax-free cash (your cash lump sum) to suit you, up to a certain limit. A retirement quote from us will outline your options here when you’re thinking about retirement.

You can take your Investment Builder savings at the same time or independently from your retirement income. Read our Flexibility with the USS Investment Builder guide to explore your options with these savings.

Useful resources:

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Work out if you’re on track for the retirement you want

Once you’ve got an idea of how much you’ll spend in retirement, where you might save and what your total income will be, you’ll start to see if you’ll have enough for the future lifestyle you want.

If you’re not quite on track you might want to consider saving a little more. One option might be making additional contributions to the Investment Builder through My USS.

Useful resources:

  • The Money Advice Service’s budget planner is a useful tool to help you plan what you might need.
  • Use our benefit illustrator to see the effect of saving additional contributions on your pension.
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Make sure your loved ones are taken care of

Life cover gives you reassurance that your loved ones are looked after should the worst happen.

When paying into USS, you get life cover of three times your salary as a lump sum payment and you tell us who you’d like to receive it. Complete an Expression of Wish form to tell us who you want your money to go to.

This could also include a pension for your dependents too.

More information:

  • Visit our life events page for more information and the forms you may need to complete.
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Get up to speed with tax implications

Any income from your pension benefits and savings is taxable. Just like a regular income, the rate at which it’s taxable depends on the amount of income you receive from your pension and other sources too.

Consider your options and personal circumstances carefully when deciding how to take your money.

Useful resources: