Is retirement no longer a distant prospect, but something that’s only a handful of years away? If so, it’s probably time to start planning it in more detail. You may have some ideas about how you want to spend your retirement. The best way to make those plans come to life is by doing exactly that – planning!
Determine your retirement spending needs
Make a list of the things you’d like to achieve in retirement. If you’d like to do a lot more travelling, as 44% of British retirees do, then your spending is likely to be higher.
In the UK, there’s no longer a legal retirement age that your employer can enforce. So if you are lucky enough to have plenty saved up, you may even be able to retire early.
If you need some guidance with this, it’s always a good idea to speak to a financial advisor.
Work out your retirement income
If you’re not aware of how much you’ve currently saved in your pension pot, now is the time to find out.
If you expect your lifestyle to remain largely the same, you should be aware of how much you’ll need to budget.
The state pension may give you a boost when you reach the age of 67. Bear in mind that this age is subject to reviews though and may change at a later date.
Need a little extra help? Use a pension calculator to find out what your retirement income is likely to be.
Stay on top of estate-planning
While you’re planning for retirement, it’s also important to do some careful estate planning. By putting this in order, you can prevent your loved ones from having to deal with an expensive, prolonged probate process after you pass away. A clear, up-to-date Will means that family members won’t be in any uncertainty about who is to inherit what. Sadly, ambiguity in this area can sometimes lead to family rifts.
Try to clear any debts before you retire, if you can. It may even be an option for you to use your pension tax-free cash lump sum to erase any lingering credit card debts or mortgage repayments.
Decide when to retire
When you’ve had a good think about all the necessary things, it should be easier to determine at what age you can draw your pension. If you have a workplace pension, check whether it specifies a minimum age (between 60-65 is common).
If you still feel able and you enjoy your job, you could consider taking a late retirement. The upside of this is that when you do retire, you could have more money at your disposal.
Retirement planning may sound like a big task. Luckily, there are lots of tools online and specialist financial advisors that can help!