Would you pass a Midlife Money TÜV? Try our quiz

There are growing concerns that more and more older workers are retiring unprepared for the rising costs of funding their golden years. In order to think about preparing for retirement, so-called mid-life MOTs are being expanded.

These MOTs are essentially online or in-person tests and courses to help people in their 40s, 50s and 60s take stock of how secure their finances really are — and get back on track. How good are your finances? Take Money Mail’s Midlife Money Quiz and find out.

We worked with pension giant Aviva, which offers free tests along with other major providers and the government’s website, to create the following questions.

Choose the answer that best fits your lifestyle and finances. Give yourself 3 points for each A answer; B gets 2 points; and C only 1 point. Add it up and see how you stack up – then follow our experts’ advice.

Midlife MOTs are essentially online or in-person tests and courses designed to help people in their 40s, 50s and 60s take stock of how secure their finances really are

Midlife MOTs are essentially online or in-person tests and courses designed to help people in their 40s, 50s and 60s take stock of how secure their finances really are

1. Have you set a monthly goal for your spending and saving?

a) Absolutely. I know exactly how much I’m spending and keep track of everything in a color-coded spreadsheet.

I have several savings and investment accounts and top them up monthly.

b) I spend money as I go, but I keep my budget in mind. I transfer money to a savings account or investment plan about once a month.

c) No. I’m hopeless at keeping track. I keep all my money in one account and hope to have some left over at the end of the month.

2. Do you need to borrow money to make ends meet?

a) I would never buy anything I couldn’t afford and I don’t have a credit card. I’ve always lived by the principle that all debt should be avoided except for a mortgage.

b) I have occasionally had to use a credit card in emergencies or for large bills, e.g. B. to fix my car or fix a leaking roof. However, I always paid it off within a few months.

c) I have multiple credit cards and have found that I tend to use them more and more as the cost increases. I can’t afford to pay them off every month but I have to keep using them to cover the basics.

3. How much cash have you saved for emergencies?

a) I have about six months (or more) of living expenses saved in an account that I can access easily.

b) I have several thousand pounds in a savings account that would see me through at worst. But it would only last about two to three months.

c) I have very little savings and cannot put anything away at the moment. Every cent goes towards the daily cost of living.

4. Have you calculated when you can afford to retire?

a) Yes, I know when I want to stop working, have thought about how much I need to save by then and have a clear plan on how to achieve that.

b) I know how much I have in my pension but am not sure how much I will need. I plan to stop work when the time feels right.

c) No, I have no idea how much pension I have. And I haven’t even thought about how much I’ll need for a retirement that could last 20 years or more.

5. Do you know how much the state pension is worth today?

a) Yes, and I can tell you how much it will increase by next week for the new tax year: £10,600 per year.

b) I have a rough idea it’s around £10,000 a year.

blank

c) No, it would be a guess – but I hope it’s enough to pay the bills!

6. Do you know how much you regularly save in your private and company pension plans?

a) Yes, and I’ve even chosen to increase the amount I deposit each month.

b) I know it’s coming from my salary and have an idea of ​​the percentage, but I’ve never taken the time to double check.

c) Does my employer pay into a pension for me?

If so, I don’t know how much is in it.

7. Do you know where your private and company pension(s) are invested?

a) Absolutely. I transferred old pensions from previous employers to my new one and keep track of them every time I change jobs.

b) Yes, I know the names of the companies I have a pension from, but I’ve never tried to log in.

c) I have no idea and don’t even know how to find out.

8. Have you calculated how much your personal and occupational pension(s) could be worth when you start drawing them?

a) I know exactly how high my various company and private pension schemes are and how much income they will bring me in old age.

b) The income my company pension will bring is on my pension slips, but I can’t remember what it is.

c) I wouldn’t even know how to find out.

9. Do you see your retirement as a process over time rather than a fixed date?

a) Yes, I plan to go part-time and slowly relax over the course of a few years.

I couldn’t face the cliff of working one day and quitting completely the next.

b) It depends on my options when I reach retirement age. I’d love to stop working entirely, but if I need the money I’ll keep going until I feel enough is enough.

c) Not at all. I have always envisioned the day I will retire and look forward to celebrating the end of my professional life.

10. Do you regularly get career advice from others at work?

a) Although I am middle-aged, I still want to develop further, so I regularly seek advice from my superiors and other trusted colleagues.

b) Once a year I ask my boss about my future as part of the appraisal interview.

c) At my age, I don’t need careers advice. I just keep going.

11. Do you have a good work-life balance?

a) I have clear boundaries between my work and my family life. I never take in more than I can handle and also make sure not to take it home at the end of the day.

b) Work can get hectic at certain times of the year, but during quieter times I usually make sure I can get home to exercise and spend a few hours with my family.

c) My job has taken over my life and is affecting my evenings. I don’t have enough energy to do things properly at home and I don’t get enough sleep.

12. Are you in control of your time?

a) I leave work on time and have a clear routine with my family that allows me to exercise, do housework, and eat and sleep at regular times.

b) Some weeks are better than others, but I have the odd stressful day or two.

c) The work usually extends to weekends and my days off. I also have a lot of family demands at home and by the end of the day I feel exhausted. My to-do list often seems endless.

What your score means…

Over 30

You are on your way to a golden retirement. You clearly have your finances under control, says Alistair McQueen of Aviva. But even if you answered mostly yes, don’t assume you can put your feet up. Dennis Hall, an independent financial advisor at Yellowtail Financial Planning, says you need to make sure your plan is foolproof.

“Think about what you would do if you lost your job or got sick,” he says, and create a plan that doesn’t tip over if that were the case.

“If you’ve been planning to downsize your home in retirement, think about what would happen if house prices plummet or your family needs urgent help.”

If you still have a few years of work ahead of you, be aware that flexible working means more people will work beyond what used to be considered the traditional retirement age.

Mr McQueen says: “You’ve worked hard to get to this point in your career, but the rule book you followed yesterday may not be the rule book for tomorrow. So try to keep up with the latest skills and technology in your field if you plan to extend your income from work.’

… 20-30

They scored in midfield. They have a solid base, but there is room for improvement.

Mr McQueen says this test is designed to provide a nudge to focus on aspects of your financial future that you have not yet planned.

If you’ve mostly scored Bs, the first thing you need to do is figure out how much state pension you’re entitled to — and from what age. You can find this information at gov.uk/check-state-pension. Next, make sure your retirement planning is on track and you’ve set the right goals. That should be enough to get you a top score on your next money MOT, says Mr. McQueen.

Mr Hall says: “You may know, for example, that you pay 8 percent of your salary into your pension scheme – but try to find out if that’s enough and how much it might actually be.”

Try the pension calculator on our sister site at thisismoney.co.uk/pensioncalculator. You simply enter the value of your pension pot, your salary and your monthly savings – and it will show whether you will achieve your goals.

… Under 20

Bad news – you are in danger of passing the Midlife Money MTÜ with a score below 20. But there’s no need to panic, says Mr McQueen — you can always get back on track.

“An excellent place to start is to plan your monthly budget and understand how the state pension works,” he says. “These two measures give you a good foundation to build on.”

When you’ve scored mostly Cs, it’s time to take bold action. Mr Hall says it’s crucial that those in their 40s and 50s work out their state pension entitlements sooner rather than later.

“Check your Social Security contributions to make sure you’re not inadvertently missing out on credits you should be getting — for example while caring for family members,” he says. “Don’t leave it until it’s too late and you can’t fill those gaps.”

The next step is to check your company pension scheme. “Ask your employer for information about how much you’ve already saved and where it’s invested,” he says.

Some links in this article may be affiliate links. If you click on this, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow a business relationship to compromise our editorial independence.

https://www.dailymail.co.uk/money/pensions/article-11939451/Would-pass-mid-life-money-MOT-Try-quiz.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 Would you pass a Midlife Money TÜV? Try our quiz

Related Articles

Back to top button