Your retirement years provide you with an opportunity to do things you’ve always wanted to do and more of what you enjoy. Of course, to enjoy your retirement fully, you need to plan.
Where do you want to live? How do you want to spend your time? Can you afford a car? Do you want to enjoy nights out? All these questions need addressing, and retirement planning will provide the answers. More importantly, you will get an indication of how much money you will need to sustain the lifestyle you desire in retirement.
Your retirement planning stage is the time to get all your big ideas out. You can decide what’s achievable later, so don’t hold back on your aspirations. Once you have them set, a financial advisor can help you calculate what income you will need, look into Portafina.
Have your retirement plans stalled? Here’s how to plan for your post-working years.
When Do You Plan On Retiring?
Today, the UK has no set retirement age, so you can continue to work for as long as you desire, or as the situation dictates you must. If your pension is a defined contribution scheme, accessing your funds from age 55 is possible. However, to sustain your whole retirement, you might have to hold back on taking too much cash early.
The great thing about flexible pension access is that it allows you to cut back on your hours and retire gradually. Part-time work enables you to continue saving towards your full-time retirement.
Another factor that might contribute to when you retire is the State Pension. Currently, men and women receive their state pension at 65. However, this age is likely to rise in the future. If you do not have other provisions in place, the State Pension qualifying age may dictate when you can retire.
Calculate Your Potential Retirement Income.
Once you’ve decided upon your retirement aspirations and when you want to retire, it’s time to calculate your likely retirement income.
Your most likely source of income in retirement is a private or workplace pension. You may have more than one workplace pension to rely upon, depending on your employment history. You should consider whether it is beneficial to keep these pensions separate or combine them into a single plan.
A regulated financial advisor can assist you in deciding on your best pension options. They can also calculate your potential income from these plans.
On top of your private pension, you will also receive the State Pension. How much you receive depends upon your national insurance contributions. The gov.uk website can provide you with a State Pension forecast.
Next, adding other income sources might have in retirement. These could include investment properties, part-time employment, dividends from shares, and other investments.
Does Your Income Match Your Needs?
Once you’ve calculated your retirement income, look at your goals and lifestyle aspirations and check if their costs match your likely income. If your income exceeds your costs, that’s fantastic, as you’ll be able to afford the retirement lifestyle you aspire to.
However, if your costs exceed your income, you’ll need to rethink. In this case, a regulated financial advisor can advise you on boosting your retirement income and savings. Making regular pension top-up payments is one way to achieve this.
How To Draw Your Pension?
Another aspect to consider in your retirement planning is drawing your pension. How you do this can be as crucial as the size of your pension fund.
You have a few options for accessing your pension funds. These options offer you a mix of security and flexibility, and it is a good idea to achieve a balance between the two. A financial advisor is an excellent resource to consult on this aspect of your retirement.
Planning The Run-up To Your Retirement.
As your retirement nears, you must speak with several people. Your employer needs to find a suitable replacement for you, so you should give them as much notice as possible of your pending retirement. HMRC are the next people on your contact list, as they will need to adjust your current tax code accordingly. Finally, to organise your State Pension, contact the Department of Work and Pensions.
You might choose to consult with a solicitor and update your will at this stage. Although you were planning on a long and enjoyable retirement, now is an excellent time to ensure your affairs are in order, should the unexpected occur.
Your retirement is a great opportunity to experience new things and enjoy more of what you like doing. Try to view it in these terms rather than the end of your working life. As you progress through your retirement, keep looking forward and update your plans as you go.
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