Five Questions to ask yourself in Retirement Planning
The sooner you start planning for retirement, the better your lifestyle in retirement can be. As the saying goes, ‘youth is wasted on the young’, so take a look through our ‘Five Questions to ask yourself in Retirement Planning’ and start imagining life after work, whatever your age.
1. How long have you got?
The earlier you start to plan for retirement, the better. With that said, there’s still plenty of actions you can take to improve your retirement even at a later stage in life.
So, how old are you now, and what age do you want to retire?
If you are at the later stage of your career you should also consider a professional health review. This will flag up any underlying issues that you wouldn’t want appearing unexpectedly at a later date.
It’s better to enter retirement in the best shape you can possibly be, especially if you have lots of exciting, lifelong goals you hope to achieve.
2. How much are your total assets worth?
Start by getting statements of your pension if you don’t already know what it’s worth. Maximise your employee benefits now before its too late - don’t miss your chance to have your contributions matched by your employer.
Then you should also see if you can start saving more each year into your retirement account. It’s never too late to cut down on outgoings and increase savings, because it will all make a difference in the long run. Think about cutting out everyday frivolous items such as expensive coffees or one of the endless subscriptions to satellite TV channels or streaming services.
3. How much will you need to retire comfortably?
This is the fun part, where you get to write down several goals covering areas such as travel, shopping, volunteering and where you might like to live.
Consider the type of lifestyle you envision yourself having, from luxury holidays to major purchases. Be realistic, and focus on specifics that help form a clear picture of how you plan to spend your retirement.
Once you’ve planned your ideas you should be able to calculate a budget that would cover all this each year. This budget is your annual cost of living during your retirement years.
Reality can sometimes a little harder than expected at this moment. However, you can always review your goals, possibly considering slightly less luxurious getaways each year, and then recalculate your cost of living. If you cannot compromise, that’s fine too; it just means you need to concentrate on organising your finances better now to achieve your future goals.
4. Can you imagine the unexpected?
Another area to add to your annual cost of living is an emergency fund. It’s easy to plan for the things you know you want to do but what about the unexpected?
Unfortunately life has it’s way of throwing obstacles in our way such as the roof of the house needing extensive repairs or falling ill and requiring expensive medical treatment.
The unknown is just that, so it is difficult to budget for, but it’s important to have this buffer on top of your annual budget, just in case.
5. Who can help you make a realistic plan of action?
This is the time to speak to a financial advisor. A professional can take all the information you have gathered so far and help you create a retirement strategy using a diverse investment portfolio to suit your lifestyle, all from an objective perspective.
Together we can review your assets and your ideal budget, as well as any debt. Then we will not only help you achieve your retirement goals, but also start to improve your retirement savings straight away.
You will also need to arrange a will and a lasting power of attorney, both of which should be reviewed every few years.
Get in touch with either Karen or Colin to discuss your retirement options and see how our bespoke advice can help you.
Get in Touch:
Reach Laurus Associates directors Karen Barwick and Colin Dawson on:
0191 281 1234