Retirement is something that many of us prefer not to think about – especially during the first few decades of our lives. But this is a mistake. A failure to plan adequately for retirement can lead to hardship and stress further down the line. In many cases, moreover, you can put yourself in a good position with just a modicum of effort and research.
What Are the Consequences of Not Planning a Retirement?
If you fail to plan for retirement, then you’ll be reliant on the state pension. This will only extend so far, and so if you’re used to a higher income, then you might have to give up your house. You might instead delay the age at which you retire – perhaps indefinitely.
You might find that you turn to debt. In many cases, this source of finance will be high-interest, which will place a burden on you and anyone who stands to inherit from you. Perhaps worst of all, you’ll miss out on the positive vibes that retirement can bring. This is a time to rest and reflect after a lifetime of work – it should not be blighted by stress and uncertainty.
Tips and Solutions to Prepare Your Retirement in Advance
So, how might we avoid all these problems, and enjoy a positive experience going into our autumn years?
The earlier you start saving, the more you’ll benefit from interest over time, and the less that you’ll need to contribute each month. If you start in your 40s, then you’ll be paying substantially more than if you started in your twenties.
Composing a budget can lend a little structure to your efforts to save. Set everything down on paper (or in a spreadsheet), and make sure that you’re sticking to your commitments. And automatic direct debit into a savings account can be enormously useful.
Expensive, large homes might not be viable during your retirement. Besides, you might not have anyone else living with you at this point. By selling and moving to something smaller (often much smaller), you’ll be able to finance all of your plans for travel and retirement adventure. Alternatively, you might look at an equity release calculator, to see how much cash you can extract from your home, to fund your retirement.
Use Government Programs
The government is willing to offer help to savers who’d like to put some money aside for the future. In the case of a Lifetime ISA, the government will match 25% of your annual deposits, up to a limit of £1,000.
Get Professional Help
For certain wealthy individuals, the expense of hiring a professional to optimise the savings process might be justified. The input of this kind of specialist might make the difference of thousands of pounds every year – and so, in the long term, it’s worth considering.