The 5 steps you should take before you retire

The 5 steps you should take before you retire

Retiring should feel like a natural step in anyone’s life, but the decision to do so can often be delayed or fraught with more challenges as a result of poor planning and savings earlier on in life.

Don’t retire in debt

This might sound like an obvious piece of advice but sometimes the reality is not always that simple. Retiring in debt will effectively create a multitude of different financial problems for you and your family. The reality is that interest rates and credit card repayments become increasingly harder to pay off once you head off into retirement. Outstanding payments tend to have a greater impact on the weekly budget and while interest rates don’t decrease, neither does the household income. The unfortunate reality is that this disparity in income and expenditure will more than likely end up having a negative impact on the quality of life you have in your retirement.

Understand your retirement income

One of the amazing things about consistently paying into a pension fund is that you should be acutely aware of the amount of money you have managed to accumulate over your years of employment. Because of this, you should also be able to roughly work out how much money you will be paid on a monthly basis after you retire. If you're expecting to live comfortably in your retirement you should make sure you have your maths right, because if you miscalculate your retirement income you might have to reconsider weekly budgets at a later date. Seeking financial advice earlier on will ensure a strategic plan is in place to make sure your everyday life post – retirement is comfortable and stress-free.

Work out a budget

After working out how much your retirement income is going to be it is a very good idea to make sure that you create a budget that fits your means and needs. No one wants to retire into a routine that is restrictive or completely changes their way of life, so making sure that your retirement income matches the expectations you have of your weekly retirement budget is key. Once again, financial advisors are experts in holding your hand through these steps and will make sure you are setup according to your own personal probabilities and needs.

Think of ways to make a bit extra

Retirement doesn’t have to mean a sedentary lifestyle – in fact quite the opposite. Retirement often means a new start for a lot of people, the chance to follow ambitions that they perhaps abandoned for more stable professions years ago! There are lots of opportunities for retirees to make money, through arts and crafts to more straightforward means of part time jobs and volunteering. There are many ways to make a little bit extra money to add in to the pension at the end of each month as long as you have the industry and imagination to find them.

Understanding your collateral

This is a piece of advice that depends on both situation and circumstance. Naturally over a period of years people accumulate wealth other than that of their pension. This could include shares or property. Depending on whether you have anyone to inherit these things, you have the option to sell the equity for part of your house in order to release funds to spend and enjoy!

The advice on this website may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

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