Retirement is something we all have to look forward to, and planning for your post-working years will allow you to enjoy them to the full. So, when we decided to provide you with some top tips for retirement planning, we thought the best people to ask were those already enjoying these precious years. So, read on to get their ten top tips for planning your retirement.
1. Monitor Your Investments
Keep a close eye on your investments in the run-up to your retirement. The money you need five to ten years after you’ve stopped working is the most vulnerable, and you should consider this when setting your spending priorities. Try to find investments that provide a predictable income, but be aware that these will generally offer a lower return on your investment.
2. Plan For Inflation
You will need to plan for inflation during your retirement years as this is a certainty, and your spending power will diminish as prices rise. Therefore, understanding inflation and planning for it will make you better prepared for when you retire.
3. Talk About Retirement Spending With Your Partner
You should have an open and frank discussion about your retirement finances with your partner or spouse. Doing so will put you both on the same page regarding your spending and other financial matters. Just as you would discuss a significant financial decision such as a house purchase or buying a new car, talk through your retirement in the same way.
4. Focus On Your Health
The more you focus on your health and physical fitness before you retire, the more comfortable your retirement years will be, both in terms of health and finances. Unfortunately, healthcare costs are something that many people fail to consider in their retirement planning. Therefore, when you incur such expenses, it can come as a shock.
5. Produce a Monthly Budget and Stick To It
The most effective way to produce a budget is to understand how much income you have and what you need to spend. This principle may sound rather basic, and it is, but many people fail to maintain an adequate budget. Projecting your retirement income can be challenging as it is in the future, and you cannot be confident how your investments will perform. However, you can get help in calculating your income from an investment professional.
6. Find a Good Investment Professional
If you decide to take the previous tip, you should try to find a good investment professional. As well as helping you with calculating your retirement income, an investment professional can help you plan for fiscal health during your retirement. If you don’t know a good investment professional, speak with friends and family to find out if they can recommend one. When it comes to finding a good investment professional, referrals are a safe option.
7. Watch Your Travel Spending
Traveling is more straightforward and less expensive when you are young and mobile. Therefore, you might want to consider taking more significant holidays or to more challenging destinations before you retire. Also, try to maintain the same amount of financial prudence when you travel as you do at home. Of course, everyone wants to enjoy themselves when they travel, but overspending abroad may mean tighter budgeting when you get home.
8. Free Yourself of Your Mortgage
Having the security of owning your home outright is not only liberating; it will leave you significantly better off. If you have no more mortgage payments to make, the money you previously spent on accommodation can go to some other area of your spending.
9. Keep Working a Bit Longer
One way to ensure you have enough money for your retirement years is to keep working a bit longer beyond your planned retirement age. Okay, this may not be what you envisaged for your retirement, but it certainly makes sense in terms of boosting your retirement funds. Remember, anything you put into your pension will be exempt from tax, and your pot could benefit significantly from a couple of additional years of compound interest growth.
10. Plan On Spending More
Even if you have done extensive planning for your retirement, you will still encounter unexpected expenses, so you should factor these into your budget. Healthcare, property maintenance, car repairs, and so on are all things that could crop up. Try to plan, and consider setting up an emergency fund for such events.
Your retirement is getting closer, and as soon as you start planning for it, the better. Hopefully, these ten top tips for retirement planning will help you get started or give you something else to think about if you are planning already.