Proper retirement planning involves a lot of different components. Simply having a pension plan doesn’t necessarily mean you’re prepared.
The good news is that you can be quite creative when preparing to retire. Let’s take a look at some of the best things you can do in order to prepare.
Retirement planning preparation
You may still be in the process of trying to save for retirement. Or you may be moving towards the end of your career with retirement closer on the horizon.
Either way, there will be plenty you can gain from these tips. So let’s dig into some of the best things you can do right now.
1. Deal with debt
Debt is never good for your finances, especially when you’re aiming to retire and become financially independent.
Clearing out any existing debt is the top tip from Expert Pensions Claims.
They explain: “It goes without saying that wiping away any existing debt is one of the key factors to living an affordable retirement. Not only this, but paying off debt should be the first step you take when it comes to your retirement planning, as this initiative allows you to save more money in the run-up to settling down.”
Using one of our top-rated balance transfer credit cards can be a great way to minimise how much interest you pay while you clear your debt.
2. Pay off your mortgage
Okay, so a mortgage is still technically debt. It may work very differently to things like consumer debt, but it’s still a really good idea to get this paid off.
If you’re planning to retire in the near future, keeping a roof over your head when you’re no longer working should be a key consideration. By focusing on getting your mortgage paid off, you’ll relieve yourself of a massive burden.
3. Review your investments
Now that debt is covered, it’s time to think more positively. Organising your investments so that they serve your needs is a vital part of retirement planning.
If retirement is an immediate option, it’s likely that you’ve been saving and accumulating wealth by doing things like:
- Buying shares
- Paying into a pension plan
- Being a regular saver
- Paying National Insurance (NI) to receive a State Pension
It may have been a long time since you started doing these things, so it’s important you go through everything to see exactly where you stand.
With your pension plan, it’s worth double-checking to make sure you weren’t mis-sold your scheme or SIPP when you took it out. If you do this, make sure you only seek guidance from the FCA, the FSCS, or a reputable claims management company like Expert Pensions Claims.
4. Create a financial plan
Having a proper plan will tie all of these tips together.
Create yourself a budget and a realistic record of your expenses. This will help you maintain your standard of living, prevent you from taking on new debt, and provide clarity on what you require from your investments.
It’s important that you’re really honest when you do this. If you love holidays, that’s okay! Just make sure that you account for things like that when planning your retirement. This will help to ensure you have the lifestyle you want and deserve.
5. Work part-time
Some people will retire, excited about doing no more work. However, after a lifetime of working hard, it may be the case that you want to carry on to a certain extent. This is a more common choice if you genuinely enjoy the work you do.
Retirement can also be a great opportunity to try something new. By planning and unburdening yourself, this can be a great time to work on something different.
This may just be a hobby, but you might even be able to make some money from doing something you enjoy.
6. Mentally prepare yourself
Even with all this preparation and retirement planning, it’s going to be a different pace of life. It’s important to mentally prepare yourself.
It’s impossible to predict exactly how you’ll feel, but it’s likely things will feel different. You’ll enjoy your retirement more if you accept and adapt to these changes rather than fight against them.
Working through the discomfort will allow you to grow and perhaps get to know a side of yourself you weren’t even aware of. This is a great time to be alive and there are still so many ways you can positively impact the world with all of your knowledge and experience!
Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.