When it comes to planning for your retirement, everyone is different. We all have individual dreams and goals – therefore, a retirement plan for you will differ from somebody else. Ultimately, you need to tailor your retirement plan to how you wish to live your life as you grow older. We have written various articles on retirement and goal setting, so we have compiled a simple 3-point checklist for you to consider below:
1. Do you have a goal, plan or simply a vision of how you would like to live when you retire?
Most of us daydream about what it would be like when we stop working, or where money is no object to living your life exactly how you choose. It’s important to align your retirement plans with your spouse or partner and, obviously, if you have any dependants who may require your ongoing support (i.e. carer responsibilities). Some people create a ‘mood’ or ‘vision’ board comprising of the things they want to do or achieve. Or, you could simply write a list. Often known as a ‘bucket list’, this could include learning, training, activities, as well as travel and relocation.
For example, there are an increasing number of people aged 60+ who return to education to gain a degree or retrain in an area they enjoy. Recent reports in the media have shown that the over-50s are now the new ‘business start-up’ generation. This age group are leaving long-term careers to start their own businesses in the areas they enjoy. Recent pension freedoms, allowing access to funds and benefits from the age of 55, can provide a financial buffer for those wishing to create new business ventures later on in life. For many people these days, life begins at 60, which means there are an infinite number of opportunities for you to follow your own interests, whether it’s for business or leisure.
2. Do you know the total value of your pension, savings, investments or other assets, such as property?
Once you have created a vision or list exploring how you would like to live when you retire, the next step is to check whether you can actually achieve your goals. You may have money tied up in various places – pensions, savings accounts, ISAs, investments, and you may have some business interests too. It’s worthwhile gaining an accurate valuation of all your assets, especially the value of your pension, so you can begin to plan for your future. Ideally, you should be aiming for financial freedom as early as you can, so you can enjoy your life to the full. Read our recent guide to trusts and estate planning for helpful advice or speak to one of our financial planners.
3. Do you know how much you will need as a baseline for a comfortable retirement?
This all depends on your goals. Consumer association, Which, suggests that retired couples currently spend around £26,000 per year to live comfortably – i.e. spending around £4.5k on holidays and around £3.9k on groceries. However, to enjoy a luxurious retirement, Which suggests that retired couples are spending around £39,000 per year – i.e. £11.8k on holidays and, interestingly the same amount on groceries (£3.9k) – see the full Which article for the full breakdown.
Whether you are currently living a comfortable or luxurious lifestyle, to continue in this vein when you retire, you will need to take into consideration future interest rates, inflation and other potential economic downturns that could affect the price of goods and the cost of living. Seek professional financial planning advice if you are trying to assess how much you are likely to need when you retire.
“I see retirement as just another of these reinventions, another chance
to do new things and be a new version of myself.”
Read our Guide to Retirement on our Big Life Events page.
If you need advice when it comes to planning for your retirement, please get in touch to speak to one of our financial planners.