Planning for a happy retirement may seem obvious to many. On the other hand, retirement planning for some, may not even be on their radar.
Some start early.
Some leave it late.
Some leave it entirely to chance.
The fact of the matter is, retirement and having a happy one isn’t a game of chance.
In this article, we cover 10 quickfire tips on how to plan for and save towards a happy retirement.
10 retirement planning tips
The retirement planning tips we focus on today are:
- Get clear on the value of your pensions and investments
- Plan for inflation
- Agree a retirement spending plan with your wife, husband or civil partner
- Focus on your health. Physical not just financial
- Work with a retirement planner
- Have a clear budget for spending, and an effective savings plan
- Use savings apps
- You will overspend in retirement, as much as you do now
- Enjoy your life
Get clear on the value of your pensions and investments
Do you know the value of your current pensions?
Have you modelled the likely value of your pensions pot if you were to maintain your current contributions over time?
How about your investments?
Do you have shares, ISAs, bonds, or a Buy-to-Let property?
Now and always is the time to be clear on the value of your pensions and investments.
They will help pay for your retirement.
Knowing what you have, will help you gauge the retirement your are likely to have if you maintain your current financial patterns.
Related reading: Pensions advice: Are you at risk by not understanding your pension?
Plan for inflation – it’s inevitable
Inflation is a fact of life.
Currently in early 2022 (when this article was written) inflation had reached over 5% in UK.
How will inflation impact the value of your retirement pot in real terms?
Inflation essentially means the value of a pound in your pocket, will be worth less as time goes on.
Related reading: What is inflation, what causes it, and how is it measured?
Agree a retirement spending plan with your wife, husband or civil partner
Sit down with your nearest and dearest and agree on what retirement is going to look like for you both financially.
Can you carry on at your current run rate?
Will you need to tighten the belt?
What can be done in the meantime to bridge the gap between your expected retirement income and the one you want?
Focus on your health. Physical not just financial
Saving for a happy retirement is pointless if you are leading the lifestyle of a rock star and wish to reach a ripe old age.
Old age isn’t for the feint-hearted..
Life is about balance.
That’s as much true for your physical health as well as your financial habits.
Get a check-up with your doctor.
Better still, if you can afford it, go private and get a full body check up.
A healthy body equals a healthy retirement.
Work with a pensions adviser and retirement planner
Busy life? No time to become a pension and investments expert in your spare time?
Then engage a retirement planner or local independent financial adviser.
Sit down with them and discuss the retirement you are looking for.
Be open and be honest.
They will be able to review your entire financial landscape and advise you on the best path towards a happy retirement.
Looking for help with your retirement plan? Find out more about how our retirement planning specialists can help.
Pay off your mortgage (maybe)
This comes with a caveat.
People often say, “get your mortgage paid off as fast as you can”.
If your mortgage represents a heavy burden to you financially, month in month out, you can release some disposable income over time by overpaying and clearing your mortgage.
If you are simply looking to clear your biggest ‘debt’ then this approach is understandable too.
However, what if you stopped overpaying your mortgage and switched that money into a pension every month?
What impact would that have on your net worth over 5,10 or 20 years?
What impact would that have on your retirement income?
Developments in IT and software now enable financial advisers to model your long-term finances, whilst making adjustments to reflect a range of scenarios.
Find out more about our life and financial cash flow modelling software.
Have a clear budget for spending, and an effective savings plan
As we said at the start of this article, retirement planning isn’t a game of chance.
Plan your spending.
Have a savings and investments plan.
Get into good financial habits, and remove the bad.
Related reading: Good or bad financial habits. Which do you have?
Use savings apps
Apps such as MoneyBox and Plum help people save a little every month without really noticing.
They round up your spending on your card to the nearest pound and pop the difference into an investment plan.
It’s the same concept as the money jar at home – from when life was simple, and Des Lynham presented Grandstand, and Big Break was on the TV.
Related reading: The best automatic money savings apps
You will overspend in retirement, as much as you do now
You’re human. Best laid plans, always deviate a little.
If you are 20% over budget now, you will likely be 20% over budget in retirement.
Don’t beat yourself up.
Just be practical, and plan for reality and not hope.
Hope has never been a strategy.
Enjoy your life
Retirement planning isn’t about sitting indoors and vilifying yourself every time you spend a pound note.
Enjoy your life.
That doesn’t mean rushing out now and emptying your bank account on your latest hobby.
It simply means you need balance.
Life throws up curveballs here and there. Enjoy your life now, and plan for an enjoyable retirement too.
About Sterling & Law – Hampshire
At Sterling & Law – Hampshire, our independent financial advisers and retirement planners, work with individuals and families, helping them to realise the financial future they crave.
We are fully independent, not tied advisers meaning we have access to the whole of the investment market and can therefore always recommend the right investment for your specific needs.
Our retirement planning service
If you have enjoyed this article and are looking for some advice on how to plan for you ideal retirement, or need an IFA to help make some adjustments to your current plan, call us today on 01329 550190.
Alternatively, visit our dedicated retirement planning page.