Whether retirement seems a long way off or just around the corner, it makes sense to spend some time thinking about what kind of future you want.
Increasingly, many of us don’t go directly from working to being retired – and pension savings are now more flexible than ever, giving us more choice about what retirement looks like. These five ideas can help you get prepared.
1. Work out your numbers
Did you know that according to research by Which? in 2022 we need a £204,950 pension pot to retire comfortably? That’s based on enjoying a similar lifestyle as the average working income.
That same research says the average amount people have saved is around £75,500, so there’s quite a gap. A good place to start is by finding out what your pension plans are worth, so you’ve got a clearer idea of what you can look forward to.
2. Build healthy habits
Many of us look forward to retirement as an opportunity to make the most of our free time. A chance to travel perhaps, devote more time to hobbies and interests or spend more time in the company of family and friends.
Some people see it as the chance to start something new, like doing a degree or returning to study. Doing more exercise is another thing people look forward to, and it’s certainly a great way to aim for a long and happy retirement.
3. Pay down your debts
Now is a good time to pay down as much debt as possible. It makes sense to avoid carrying mortgage debt and credit card debt into retirement, and paying off your debt in your 50s could really boost your pension savings.
For example, if you can pay off your mortgage then take the amount you’d normally pay each month and add it to your pension. It all adds up to a significant boost to your income in retirement.
4. Set some goals
What kind of retirement are you looking forward to? Increasingly, many people plan to stay active rather than stopping work completely – whether that’s starting a business, working part-time or volunteering.
Work out what matters to you, and when you want to achieve things by. Make a budget. Some costs will be lower, such as travel costs – but be realistic: don’t forget to think about things like holidays and entertainment.
5. Consider investing
On top of your pension arrangements, investing could be another way to grow your money for retirement.
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