Graduating from a lifetime of labour to one of leisure is a major lifestyle change and a huge shift in anyone’s day-to-day routine. The transition can be made a whole lot easier with the aid of some simple planning in advance. This incorporates not only getting your financial house in order (obviously a very important part of the change) but also taking the time to prepare yourself emotionally for retirement. The tips below will give you an idea on how to go about getting ready for your last ever P45.
Make sure your savings are adequate
It might sound obvious, but not putting enough aside to enjoy a comfortable retirement is the number one mistake made by retirees. This handy pension calculator from Nutmeg allows you to see how much you need to save per month in order to achieve your desired nest egg, so you can start as you mean to go on sooner rather than later.
Budget for new spending and saving habits
Of course, once you’ve packed in your job, your day-to-day spending costs will most likely fall in some areas, such as travel, food and other work-related expenses. However, spending more time in the house may mean increased energy bills, while your leisure and healthcare outlay may rise too. Make sure to factor this into your pension budget.
Check your benefit qualification status
The state pension age in the UK can be anywhere between 60 and 68, depending on your sex and year of birth. However, with advanced years there also come a number of financial benefits for older people, including a Housing Benefit, a reduction in your council tax or even a Carer’s Allowance, where applicable. Check if you’re eligible for any and all benefits the government offers.
Track down all of your pension providers
Have you had a number of different jobs for various firms over the years? Make sure you receive the full amount you’ve accrued through all of your employers by contacting every single one of your pension providers and letting them know you’re nearing retirement. If you’re having trouble tracking an old provider down, the Pension Tracing Service might be able to provide some answers.
Consider paying off your mortgage and other debts
The last thing you want to be doing is entering your golden years with the albatross of outstanding debts hanging around your neck. If you still have a mortgage, check how much is left to pay off and consider putting it to bed once and for all with one last lump sum payment. The same applies to credit cards, personal loans and any other debts you might have amassed over the years.
Think about living arrangements
Many people choose to move abroad after they retire. Warmer climes and a more relaxed pace of life can prove an irresistible temptation to some – and you might want to think about whether the idea of expatriation makes good practical and financial sense for you, too. Even if you do decide to stay in the UK, downsizing (or upsizing) your house could be an option.
Don’t let go of a routine
The amount of free time that will suddenly become available to you might seem like a dream come true, but without a routine, a hobby or some other form of stability, retirement can be unfulfilling. Retiree Jay Cassie conquered the monotony of life without work by creating a three-point plan through the identification of specific goals she wished to achieve.
Discuss daily schedules with your partner
Couples often retire at different times from each other, especially if they are not of the same age. Make sure you have a discussion with your other half to clarify what you both want from the impending change to your daily lives, so that you can coexist and move forward into this exciting new era in harmony.