How to prepare for retirement

Retirement is an important milestone in our lives – one many of us are looking forward to. From sorting out your finances to finding productive ways to spend your newfound free time, you need to have a plan in place for life after work. The rule goes that the more prepared you are, the smoother your retirement will go.

Work out your retirement income

The first thing to do is to sit down and work out just how much you’ll have at your disposal when you hit retirement. Your pension fund accumulates throughout your working life so the earlier you start saving the higher your balance. However, you may not know how much you are due to end up with – this is easily remedied by using a pension calculator.

If you’re not pleased with your contribution plan, try to increase your payments where you can or begin to set aside money for a separate savings fund. It’s also wise to keep an eye on the rising state pension age and forecasts to track how much you’re on course to receive from the government.

Aim to reduce debts

Unfortunately, your debts don’t disappear when you reach retirement age, so it is important to reduce high-interest loans in good time or you’ll need to dip into your hard-earned pension. Rather than trying to forget about them, you’re better off confronting the situation head-on and evaluating how you can realistically afford to eliminate your debt.

Talk to your creditors to see whether you’re able to come to an agreement that supports a debt solution in a period that suits you. If you can’t afford to pay off your loans straight away, you can apply for the government-backed Breathing Space scheme that gives you 60 days when your creditors can’t contact you or add interest to your debt.

Prepare for retirement emotionally

Retirement is a big life change and though you might be looking forward to it, you may find yourself experiencing an emotional crisis. The impending isolation and lack of routine could make you feel a loss of identity and purpose.  You can ease yourself into your newfound freedom by starting to think about hobbies or interests that can fill your time.

Join local support groups to find other like-minded people in the same situation, but don’t forget to make the effort to continue socialising with the friends you already have. Staying physically active is a great way to occupy your time and keep you healthy.

Get professional help and advice

Financial advisors could assist you if you’re not sure where to start or need further advice, especially regarding your estate and will. It’s also a good idea to consider over 50 life insurance to give you peace of mind and a sense of security over your affairs. Professional financial advisors can guide you on how to deal with debt, annuities, and making a will.