Many people wonder when the best time to start planning for their retirement is. Some people think that the fact that we pay into a pension from a young age is enough, but few people realize that we should really up their efforts in planning for retirement around ten years before we’re due to stop working. This gives us sufficient time to prepare our finances and assess our options. Retirement is an exciting prospect; after all your hard work over the years, you finally get the chance to relax and spend more time with your family and friends, take up new hobbies, and enjoy yourself!
When should you begin...
As mentioned, some of us may pay money regularly into pensions and savings account, but then make no forward planning, and others may not have saved at all. When you reach the ten year mark, it’s time to assess your finances and begin to keep an eye on those all important funds. Think about the money you’re spending, and create a budget for yourself. Perhaps set a monthly or weekly budget, and check your bank balance on a regular basis.
Everybody sometimes underestimates how much they spend per day, especially on a food or clothes shopping trip with a debit or credit card! If you have Internet access, why not set up an Internet banking account? You can then check your account at your own leisure instead of waiting for your bank statement or going into your local bank, and transfer money across to your pension fund or savings account.
If you’re able to make more cut backs now, you’ll benefit yourself in the future. Pensions are usually a minimal budget, so saving now means that during your retirement you’ll have the money to still go on holidays and enjoy days out. You’ll certainly have lots of free time on your hands, so why not use it?
As retirement draws closer…
If possible, a few years before your retirement clear any debts to take away that added pressure during your retirement. Perhaps consider downsizing your home, or changing your vehicle to one that is more financially practical. Not only will both of these be cheaper for you, they may be more realistic as you enter into retirement.
How about also cutting down on your workload or work hours? Retirement is such a different way of life, that many retirees consider it a difficult adjustment - some feeling bored, or at times worthless. No longer do you need to be up early, work from nine until five and make your way home through rush hour traffic. You now have no obligations and are free to live a life of leisure! It’s best to ease yourself into retirement so that it’s not such a shock to the system.
Use your final year wisely
It’s important to seek advice from a financial advisor in the last year of your working life. Not only can you gain valuable information and guidance, it allows you to make a plan for you and your finances in your retired life. Make sure that you have also informed the appropriate organizations of your retirement date. These may vary from the HMRC, who will help you to gain any benefits you may be eligible for, to applying for pension credit if you have been on a lower income.
A lot of people also find help in the form of retirement courses extremely useful. These courses, which can sometimes be organised through your place of work, can help you prepare for your upcoming change both financially and emotionally.
The trick to settling into retirement quickly and happily really is in the planning. Giving yourself plenty of time to prepare will take away any extra pressure that you can definitely do without once you stop working.