To have a successful retirement, you’ll need to plan various aspects. It is not sufficient to simply have a pension plan. However, you’ll be glad to know that you can be pretty creative when it comes to planning your retirement.
Whether your retirement is imminent or you have several decades of work remaining before you retire, it’s a good idea to start your retirement planning immediately. Financial planning can be complex. It is always recommended that you use the services of a regulated advisor like Portafina when making financial decisions. Here are six retirement planning tips to get you started.
Tip 1. Get rid of your debts.
Eliminating your debt is not the first tip by accident. Having debt is never beneficial to your financial situation, and it could jeopardise your retirement plans.
Therefore, eliminating your debt should be your number one priority. When paying off your debts, you should start with those with the highest interest payments. Clearing these debts first will leave you with more cash available to pay off the smaller loans.
Once you’ve cleared your debts, you’ll be able to save more in the run-up to your retirement. This additional money will ultimately allow you to have a more comfortable and stress-free retirement.
Tip 2. Get mortgage-free
Although your mortgage is still technically a debt, it is not the same as a commercial loan. However, it’s still beneficial to become mortgage-free as soon as possible.
Doing so will provide you with the security of knowing you have a roof over your head. It will also allow you to save more, as you’re effectively living rent-free.
Tip 3. Take stock of your investments
Having covered your debt now is the time to think more positively about your financial situation. You can start to organise your investments to serve the financial needs for your retirement.
If your retirement is imminent, you may well have some or all of the following investments in place:
- Stock market investments.
- Pension plan.
- Regular savings.
- The State Pension.
You may have established these investments many years ago. Therefore, you must check up on them to see how they perform. You can get a forecast of your state pension entitlement from the gov.uk website.
Tip 4. Develop a financial plan
Developing a financial plan will help you tie all of your finances together. A good start is to create a budget, using a realistic record of your income and expenses.
Budgeting will help you manage your spending, avoid taking on your debt, and help maintain your standard of living. It will also provide you with clarity of the level of income you need for your retirement.
When you make a budget, you must be honest. For instance, if you like taking holidays, you should include these in your monthly outgoings. Also, ensure you consider other small luxuries you know you cannot do without.
Tip 5. Work part-time
Some people view their retirement as a time to stop working altogether. However, for some giving up work can be more of a challenge. In such cases, it is common for people to continue working part-time during their retirement.
Working part-time when you retire has several benefits. For instance, it will allow you to continue saving for when you fully retire. Also, it enables you to do something that you enjoy or try something new and get paid for it.
Tip 6. Get mentally prepared.
Even with considerable preparation and planning for retirement, many people find the transition from working life challenging. Therefore, it is crucial to get mentally prepared for your retirement.
Although you cannot predict precisely how you will feel when you retire, you should understand that things will be different. You will have a more enjoyable retirement if you accept these changes rather than resist them.
Your retirement can be an exciting time in your life. You can have the opportunity to do new things and explore a side of yourself you thought did not exist.
To maximise the chances of having a comfortable and enjoyable retirement, you need to do some planning for it. Hopefully, the six retirement planning tips will help you prepare for your post-working life.
Henry Lares is still early into his career as tech reporter but has already had his work published in many major publications including Tech Crunch and the Huffington Post. In regards to academics, Henry earned an engineering degree from Apex Technical School. Henry has a passion for emerging technology and covers upcoming products and breakthroughs in science and tech.