Retirement Checklist – 4 Ways to Prepare

Retirement is an event that almost every worker in the UK looks forward to. However, between the rising state pension age and the ever-growing cost-of-living crisis, there are more people over 65 in work than ever before, and many delaying their planned retirement over money fears.

No one will ever feel truly prepared for retirement, but there are ways in which you can shore up your financial situation for a more comfortable entry into retirement. What should you do to prepare for your retirement?

Make Calculations

The first step in planning out your retirement should be to make some basic calculations regarding your finances. You will already have a clear idea of your existing financial situation in terms of your current account and any savings, and you may also already know exactly how much you will receive in terms of your workplace pension. Using this information, you can figure out your monthly retirement income and spending ability.

These calculations will reveal to you the various concessions you may need to make in order to afford your preferred retirement lifestyle. It can also be an opportunity, though, to re-evaluate your existing financial plans and chart a new route. Proper financial planning can show you new ways to invest and save your money, increasing your returns and shoring up your long-term retirement spending plan.

Set a Budget

But your post-retirement spending is only one half of the equation – and a half of the equation that can be drastically altered by changes made in the short term. In the present moment, you should endeavour to create a budget that centres on retirement as a goal. This budget would seek to constrain unnecessary expenditure while maximising your savings and pension contributions to improve your financial standing upon retirement.

Your pre-retirement budget would account for your various bills and credit obligations, as well as projected income up until your chosen age of retirement. With this information, you can better approach the handling of pension contributions.

Eliminate Debt

Of course, if you have any credit obligations, they will run counter to any plans you have for savings. Debt is a burden that should be eliminated with prejudice, as the interest rates incurred by outstanding debts serve to devalue your overall savings – no matter how you save.

Pension contributions will still make sense, shored up as they are with government subsidy, but any attempts to save or invest while debts remain outstanding will be tempered or even eliminated by interest. As such, debt repayment should be a priority.

Set Aside Emergency Funds

Once your debts are paid, an emergency fund should be your next priority. With money locked up in pension funds, savings accounts and investments, you may be more liable to struggle in the event of an emergency expense such as a vehicle breakdown or home repair. Emergency funds can help you weather the storm without affecting your long-term goals.