Delving into your finances and being realistic about the money you have for your retirement might not seem appealing to many people. However, creating a retirement plan is essential for a successful life when you stop working.
Following these five steps will help you make a successful retirement plan.
1. Get To Grips With Your Finances
If you are concerned about the amount of money you’ll have during your retirement, the time to do something about it is right now. You can explore your spending habits, and there are plenty of tools available to help you do this. Start budgeting as soon as possible and get yourself into a budgeting mindset so that you’re into the habit when you retire.
2. Consider Where Your Retirement Income Will Come From
If you’ve moved employment several times during your working life, the chances are you’ll have more than one workplace pension. If you can locate these old or forgotten pensions, you’ll have a much better retirement income. These old or forgotten pensions don’t have to be massive to make a difference. Even having something that will take off some of your living expenses during retirement will significantly benefit you.
Therefore, it is critical to locate those pensions. If you remember who the pension provider was, you can contact them directly. If you can’t, then you can trace your old pensions through the government pension tracing service.
Also, find out how much you’ll receive from your State Pension. If you go to the Gov.uk website, you can get a projected figure of what you’ll receive. You should view the State Pension as a top-up to your other retirement funds. Using it as your only source of retirement income means that you’ll probably have to limit your expectations.
Other income sources for your retirement may include rental property, and you may choose to sell your property or release some equity to help fund your retirement.
3. Be More Self-Centered
Roughly 20% of Brits agree that providing financial support to family members hinders their own financial future. You should not be concerned about occasionally saying no to your family’s request for financial aid. After all, being in a secure financial position during retirement will mean you can continue to support them at times. Have an early conversation with your family about financial support to avoid disappointment.
4. Visualise Your Financial Future
Consider how you want your lifestyle to be during your retirement. Try to visualise what you’re going to need and what you have to do to achieve that. Knowing precisely what you’ll need for your retirement is challenging, but a good principle to abide by is as much as possible and that you can comfortably afford.
It is quite tricky predicting your pension pot’s final value. Conducting regular reviews of your pension will allow you to take remedial action should you detect it underperforming.
5. Seek Professional Financial Advice
Understanding your various options for releasing income from your pension pot is critical. You may want to access your pension from the age of fifty-five. Or, you might decide to take 25% of your pension pot as a tax-free lump sum.
These are significant decisions to make, and they can be challenging to get right. Using a regulated financial advisor can help you make these decisions and secure a more financially successful retirement.
If you are looking at options for your pension, consider using a regulated pensions specialist like Portafina or, view the info at Pension Wise.