When it comes to retirement planning, who better to ask than those in the know? That's why we've consulted with current retirees to bring you the best advice on planning your retirement. Planning for your long term future is crucial; when considering your pension, take on expert advice from a specialist such as Portafina.
1. Keep an eye on your investments in pre-retirement.
The money you will need 5 to 10 years after retiring is most vulnerable to being lost. Therefore, you should avoid overspending because it's much more challenging to recover it once it's gone. Try to seek out investments that provide a predictable income. However, these are likely to give lower returns.
2. Accept inflation as inevitable.
A rising cost of living will erode your retirement funds and purchasing power. Therefore, you should factor inflation into your retirement planning and accept rising prices as inevitable.
3. Discuss your retirement plans with your partner.
Discussing your retirement plans with your partner means you will be on the same page and understand what you can spend and what retirement activities you can afford. As you would do with other significant money matters, talk about your retirement finances.
4. Look after your physical health.
Looking after your physical health will help keep you financially fit in retirement. Many people fail to consider medical costs in their retirement planning, despite the media constantly highlighting the issue. Failing to consider these costs can scupper your retirement plans down the line, so ensure you allow for them.
5. Start budgeting.
You should create a retirement budget and stick to it. However, you must understand how much retirement income you will have to do this. Many people fail to calculate how much they have to spend in retirement, so they cannot budget effectively. An investment professional can help you calculate your annual income, leading to our next point.
6. Find a good investment professional.
Just as you would go to a mechanic for advice about your car or a dentist to keep your teeth healthy, using an investment professional will help keep your retirement finances on track. If you don't know a good investment professional, ask friends or family if they can recommend one. After all, if they are prepared to refer someone, they must be confident that the investment professionals will do a good job.
7. Watch your travel expenses.
Travelling is more accessible and cheaper when you are mobile. Therefore, try to complete your more extensive travelling plans before you retire. Saving all of your travel plans for your retirement can be costly. Also, try not to spend too much when you go on your holidays. Just as you have adopted prudent budgeting at home, try to continue this when you're on holiday.
8. Become mortgage-free.
Your home is not merely a form of accommodation; it provides you with physical and emotional shelter. It will also likely account for a considerable amount of your monthly expenses. Therefore, becoming mortgage-free can free up some of your income, allowing you to pay more into your retirement fund.
9. Work for a few more years.
A straightforward means of increasing your retirement funds is to work a few more years, extending the time you can save. Although working beyond your planned retirement age might not seem appealing initially, it can significantly boost your retirement income. If you need more money in retirement then check out our article 5 ways to supplement your retirement income.
10. Expect to overspend.
Regardless of how much planning you do, chances are you will overspend. Therefore, you should factor this into your budgeting. Consider unexpected spending such as tax rises, repairs, maintenance, and so on.
To ensure a comfortable retirement, you need to do some financial planning. Who better to seek advice from than those going through retirement currently. Hopefully, these 10 retirement planning tips from those in the know will enable you to enjoy many years of a comfortable retirement.
Worried your parents don’t have enough money to retire? Read our article what to do if your parents have no retirement savings for some great tips.
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