The State pension age has increased several times and now stands at 66 years and 9 months for both a man and a woman born in January 1961. There is no hard and fast rule when it comes to retirement but don’t even contemplate thinking about it if you are not financially secure. The general advice is to start planning approximately two years before your preferred retirement date. Do you have a personal pension plan, have you received a statement from the State Pension scheme, do you have adequate savings and investments?
Don’t take risks with any savings you have built up previously, speak to several professionals from local companies such as Gloucester, Bristol or Swindon Accountants and listen to their advice. If you are getting close to retirement age and you don’t have the future finances you had hoped for, there are still things you can put in place to help. You can immediately start putting large amounts of money into your pension pot and you can defer the date you start drawing money from it.
Start thinking about how you will budget your money once you do retire so you have more than enough for day to day expenses, unforeseen extra emergencies as well as luxuries like holidays etc. Try to have paid off any outstanding debts, mortgages, credit cards and loans so you go into retirement with a “Clean slate”!
Working out how much you will need
There is no single figure that makes a comfortable retirement. The amount you need depends on how you want to live. Start by estimating your likely annual outgoings, including essentials such as housing, food and bills, and the things you want to enjoy, such as travel, hobbies and helping family. Some costs fall after you stop working, such as commuting, while others, like heating a home you are in all day, may rise.
Your attitude to risk shapes how you save. Investments with higher potential returns tend to rise and fall more, and many people move gradually towards steadier options as retirement approaches, so a fall in the markets just before they stop work does less damage. The other big factor is time. Money saved early has longer to grow, and the returns build on themselves over the years, so even modest contributions in your twenties and thirties can make a real difference. A regulated financial adviser can help match your plans to your circumstances.