Although having a pension is an excellent start for your retirement preparations, achieving a comfortable retirement also involves many other components. Thankfully, your retirement preparations can be pretty creative. Therefore, let’s consider a few excellent retirement planning tips.
6 Retirement Planning Tips
Regardless of how close your retirement is, you have plenty of opportunities to plan for it. Here are retirement planning tips you can get on with straight away. Getting professional and regulated financial advice will help you with planning for your retirement, check out Portafina.
1. Clear Your Debts
Your most urgent priority when planning for retirement should be to clear your debts. It is never a good time to have debts, particularly when your retirement is pending.
Indeed, servicing debts can jeopardise your financial independence and prevent you from enjoying a comfortable retirement. Therefore, eradicating your debts should be your number one priority.
The quicker you can clear your debts, the better, which means you’ll have more available income to save for retirement. Also, start by first paying off those debts with the highest interest rate.
2. Become Mortgage-Free
Although a mortgage is still a type of debt, it differs from consumer debts. Even though mortgages come with relatively low-interest rates, it is still a good idea to become mortgage free as soon as possible.
Paying off your mortgage not only comes with a financial benefit but an emotional one too. Having the security of knowing you own your home outright can remove a considerable amount of uncertainty from your life. Therefore, make becoming a mortgage-free part of your retirement planning.
3. Check Your Investments
When you have dealt with your financial obligations, you can focus on accumulating more retirement income. Depending on the stage of your career, you may have some or all of the following investments in place:
- Stocks and shares.
- Personal or workplace pension schemes.
- State Pension contributions.
You should regularly check these investments to ensure they are performing as anticipated and remain in line with your current retirement planning.
4. Draw Up a Financial Plan
Drawing up a detailed financial plan will pull together these retirement planning tips. The foundation of your plan should include a budget accurately recording your expenses.
Maintaining a realistic budget will help you maintain control of your spending and prevent you from taking on new debts. It will also enable you to understand what you need from your investments to provide the lifestyle you want.
When creating your budget, you must be honest and include all your expenses. For instance, if you know you must have a holiday each year, you should make provision for this spending in your budget. The more accurate you can be, the more chance you’ll have of achieving the retirement lifestyle you deserve.
5. Keep Working Part-Time
Many people look forward to retirement as it means their working days are over. However, just as many find it challenging to stop working after a lifetime of 9-to-5.
If you are in one of the latter, working part-time could be a good option to ease yourself into retirement. It certainly has a couple of significant advantages.
Continuing to work part-time will enable you to receive an income and continue to invest for your full retirement. It also allows you to maintain critical social links you may lose when you retire fully. Part-time work also allows you to try something new, perhaps turning a hobby into a source of income.
6. Get Mentally Prepared
Regardless of how much planning you do for your retirement, it is likely to be a significant change in your pace of life. Therefore, you must get yourself mentally prepared for this change.
Nobody knows precisely how they will feel on retirement. However, you can be sure you will experience some emotions. Rather than resist the inevitable changes retirement brings, accept them and adapt your life accordingly. Doing so will allow you to grow and discover new aspects of your personality.
Retirement is an exciting new phase of your life. With a lifetime of work, knowledge, and experience behind you, you have an opportunity to continue making an impact on the world.