Achieving financial security when you retire won’t just happen; it will take careful planning and discipline. If you want your life after work to be fun and comfortable, you’ll need to build a financial cushion that can support it all. The process may sound tedious, and in reality, it can be. However, it’s not as complicated as it sounds. In this article, we’ll talk about a few helpful tips that should help you prepare for your retirement. Continue reading if you want to know more.
1. Start early and commit to your goals
If you’ve already begun to save, keep on going! Economising is a rewarding practice, after all. But if you haven’t, it would be best if you get started immediately because the earlier you do, the more money you’ll be able to put aside and grow. Early pension savings also benefit from the power of compound interest, which makes them worth a lot more than money that you put away later in life. Create a plan and commit to your goals, no matter how small the amount you’ve decided to save up on each month. The key is to stick with it so you can build up on your savings.
2. Understand your needs for when you retire
Retirement can be expensive. If you want a comfortable retirement you need to be aiming for an income of £19,000 per year if you are single or £26,000 if you are in a couple. The bare minimum according to research from consumer champions Which is £13,000 for a single person or £18,000 for a couple. Given the state pension will only give you around £9,000 each, the average person is going to need a private contribution of at least £4,000, which equates to a pension pot of around £100,000.
Get a grip on how much you have in your pot right now, then calculate how much more you need to contribute to achieve the size of pension pot you will need for your retirement aspirations. Planning ahead will give you a much better chance at securing a comfortable and worry-free retirement.
3. Know the pension plan of your employer
If your place of employment offers a pension plan, be sure to check exactly what is involved. How much does your employer contribute and what other terms are applied? Ask for individual statements so that you can keep track of the fund’s progress. Also, don’t forget to look into how things will work if you decide to switch jobs. After all, your situation could change in the future, and you’ll have peace of mind if you completely understand your employer’s pension plan.
The pensions situation is quite different for the self-employed. If that’s you, then you will have to take full responsibility and set up your own pension scheme. Far too many self-employed people put it off and as a result, self-employed people in the UK have lamentably low levels of pension savings. To help you get started check out our guide to pensions for the self-employed here.
4. Consider hiring a professional
Saving up for your retirement can be a complicated affair. From understanding your investment options to learning about the benefits that Social Security offers, it can be a lot to take in and to get just right for your situation and aspirations. Fortunately, you can make it a much easier process by hiring an adviser who is local to you. By seeking independent financial advice in Kent, London, Belfast or wherever you are located, you’ll be able to map out your road to retirement success much easier. More importantly, they can help you avoid any mistakes that could potentially derail your plans, ensuring that you get the best possible results.
Most of us will have to eventually retire at some point. If you don’t want to extend your working life past where it should end and if you want to ensure that your retirement years are free of any financial worries, you need to carefully prepare for your retirement. It’s never too early to get started so don’t delay.