Retirement planning is more than simply paying into a pension. It can be a complete change of lifestyle and the biggest that you will face since starting your first job, moving into your own home or becoming a parent. This is not an adjustment that can be made overnight and needs to be thought out and planned well in advance.
It is easy to disregard the emotional unrest that can accompany such a significant milestone in your life whilst all the focus is on arranging your finances.
If you are starting to think about retirement, this guide offers some tips to help you mentally prepare for this life change.
Set your goals
Understanding what you would like to achieve in retirement is the first step, even if this is just a vague idea of what you would like your retirement to look like. You might want to consider the following:
- Where you want to live?
- How you will fill your days and what hobbies you will have?
- Who will you spend time with?
These informal, personal goals can help towards the more tangible decisions such as what your likely expenditures will be, whether you should move home or if you should consider making gifts to family and loved ones.
Prioritising your goals and starting early will allow you more time to bring your retirement plans into reality.
Wind down gradually
You may want to consider starting the transition towards retirement a few years in advance. This can involve, taking on a less responsibility in a less demanding role or through reducing your hours by going part time.
This can be beneficial as it will gradually ease yourself into retirement rather than an abrupt change in lifestyle which if managed incorrectly can leave to boredom, frustration and even depression.
Naturally, you may be happy to leave work on a Friday and never look back. This may be because you have plans for a change of scene such as a part time job or time away travelling.
Either way it is imperative that you consider the right route to retirement that is going to suit your needs.
Keep busy
It is important to approach your retirement with a sense of purpose. With new-found time on your hands, it can be difficult to fill your days at which point retirement can feel anti-climatic or even disappointing.
Once you have ticked off your to do list and you still have time on your hands, it is important that you find time to keep a sense of identity beyond your own front door. This could be through volunteer work, family responsibilities or being a valued member of your community; all of which can help you find a new sense of purpose in your post work world.
Maintain social connections
Without the previously daily opportunities to connect with people at after work drink, lunches and coffee machine chats, it is imperative to be intentional with our social lives in retirement and plan time for social interactions.
Loneliness can be a major issue for retired people, especially for those without family nearby.
It is important to address this and, therefore, it is important to re-connect with old friends and bond with people over common interests.
Stay healthy
To get the most out of your retirement, you need to be well enough to enjoy it. With extra free time, there are multiple things you can do to improve your health. For example:
- Eating healthily and learning new recipes.
- Joining a gym and attending fitness classes.
- Taking up new active hobbies.
- Attending regular medical check-ups.
- Getting a dog. The training process can keep you mentally and physically active. The reward is a loyal companion who will insist on daily outdoor exercise.
Prepare your finances
Come retirement, you will have to look at your finances in a whole new perspective. Once you have stopped earning, your money has effectively become finite. Therefore, you will need to keep a careful eye on your expenditure to ensure that you do not run out of money.
You will also need to review your investment risk and reward profile. Preserving capital will likely become more important than capital growth, however, you also need to make sure that your money holds its value when inflation is taken into account.
On the other hand, however, with retirement you will also have a level of financial security that you may not have enjoyed previously. Your children will likely be financially independent and you will have hopefully paid off your debt including your mortgage. Many expenses incurred through your work life such as cost of commuting, pension contributions and different types of insurance premiums will no longer be required. Therefore, if you stick to your budget you are able to spend and enjoy your money without worrying.
One of our financial advisers can help you manage your cashflow and investment plan so that you can concentrate on enjoying a happy, busy, and fulfilling retirement.
Please do not hesitate to contact a member of the team to find out more about retirement planning.