Retirement should be a time to relax and enjoy everything you’ve worked for in your career over the last 40 years. But retirement can also bring a lot of worry about your finances. Will you be able to afford the lifestyle you’ve dreamed of? And when will you actually be able to retire? Below, we explore how you can plan this out.
Calculate how much money you’ll need for retirement
Your first step is to work out what your yearly spending will be in retirement. This hinges on your mortgage: if you’ve paid it off already then, it’s possible that you can cut your spending during retirement without any issues. However, if you’ve yet to pay off your mortgage your spending will likely remain at a similar level to pre-retirement. You should also consider your goals for retirement. If you’d like to travel the world or take up an expensive new hobby, then you’ll need to factor in these dreams. Ultimately, this should help you come up with some yearly financial projections about how much money you’ll need during retirement.
Work out your income
The next step is to work out your income. This will include your pensions, any part-time income and any other consistent, dependable money that you receive. You should then measure this against your projected spending in retirement. Is it enough to cover your spending? If not, you’ll need to consider finding extra sources of income.
How can you find extra sources of income?
If your current income won’t be enough, you should explore ways of increasing it. There are guaranteed ways of doing this like finding freelance or consulting work to supplement your pension while scaling down your work. Alternatively, you could take a riskier approach and invest your savings. Meanwhile, if you’ve paid off your mortgage, you could consider equity release mortgage to unlock the financial value of your home without immediately selling it. This can be an excellent way of boosting your funding without jeopardising your future.
Wealth management experts
Finally, it’s worth remembering that planning for retirement can be complex. If you’re feeling confused with your planning, you could always seek advice from wealth management experts. While it’ll cost you to pay for their support, there’s every chance that you’ll recoup this money through their advice. This can help you get your assets in order, create a plan and begin to fully calculate your retirement plans.
Retirement is difficult enough to get your head around without the added stress of organising your finances. But by following the guide above, you should be all set to create a secure plan for your retirement.
