Retirement on Your Terms: Five Ways to Prepare Well

It’s fair to say that, when it comes to retirement planning, the earlier you start thinking about it, the better. There’s no fixed age at which you have to retire – that part is up to you. What matters is making sure you’re financially secure and able to fund the years ahead before you step away from work.

For many people, whatever their financial position, a gradual move from full-time work into full-time retirement feels more comfortable. That might mean reducing your hours first, or perhaps finding a part-time role later on that’s closer to your interests, so you don’t lose that sense of purpose overnight.

Everyone’s lifestyle costs are different, so it’s worth taking the time to get a clear picture of both what you spend now and what you’re likely to spend later.

A good way to work it out is to:

• Work out your current monthly spending. Think about the income that lands in your bank account and what’s left at the end of the month — the difference is roughly what you’re spending now.
• Think about any extra costs retirement might bring, such as more holidays, new hobbies or helping family.
• Take off any regular costs that may no longer apply after retirement, such as mortgage repayments, commuting costs, pension contributions, regular savings, or spending on dependants who will no longer be at home.
• Don’t forget to include an emergency pot for the unexpected — things like home repairs or appliances breaking down.

Start by listing your pensions, savings and investments, whether that’s in a spreadsheet or simply on paper. Some sources of income will be easier to see than others. For example, a company pension may provide a guaranteed income, or you may receive rental income from a buy-to-let property.

Most people will also receive a State Pension, with the State Pension age currently between 66 and 67 depending on your date of birth. The full State Pension is currently £230.25 a week – that’s £11,973 a year or potentially almost £24,000 for a couple.

If you need support, working with a dedicated financial planner can make a real difference. They can look at your current savings, pensions and investments and help you build a plan for the retirement you want. Visit our financial planning page to find out more.

Working with a financial planner can give you a much clearer view of where you stand now, and how long your wealth could support the lifestyle you want, taking into account things like investment growth and inflation.

I hope this helps you to feel a little more confident about planning for retirement. It can seem challenging at first, but it is achievable, and people with clear plans in place are far more likely to reach the goals that matter to them.

If you have any questions or would like to discuss your individual circumstances with an Old Mill financial expert, please do get in touch.