Earlier planning gives better results
When asked when they think they should start planning retirement, most people said ‘in my 50s, but wish I’d done it in my 40s’.
Guidelines say it is good to start thinking about your retirement options, and the choices you’ll need to make, around two years before you stop working.
But with all-important lifestyle factors to consider and practical choices to be made, it is vital that your planning starts well in advance of this. Any planning is better than none, but ideally, you should, planning for your retirement needs to start at least 10-15 years before you actually retire start early and reach your retirement age prepared and well informed.
Planning your retirement is exciting. It signals the next chapter of your life and offers many a chance to release realise previously- held ambitions or goals. Starting new hobbies and exploring new freedoms may be the top of your agenda, but what if your partner or family have different ideas? When your plans could affect their lives and their time, it is important to share your thoughts. Communicating your ideas to them is key to a happy and mutually rewarding retirement. If you don’t, you may find yourself adjusting your retirement plans and adjusting your expectations.
“If couples aren’t aware what each other wants this is storing up problems which are likely to escalate as retirement comes closer” Patrick Connolly, Chase de Vere
Deciding where you want to live when you retire, is a decision couples will have to face together when they retire. Do you want to remain in your current home, move to another house or even another country? How would you feel about moving to a new home, and how often would you see friends and family? Leaving the family home is often an emotional decision as well as a financial one. Whilst downsizing may make financial sense, improving your retirement income by freeing up a lump sum and reducing maintenance costs, the emotional cost may be greater.
Understanding your partner’s views on this will ultimately help you both reach an enjoyable and amicable retirement together.
“People should be encouraged to think about their health rather than concentrate solely on financial matters as part of realistic planning for life in retirement”
Broadening the view on retirement: Health and Retirement
Retirement happens when you have already established habits. Lifestyle choices will catch up with you and a history of a poor diet, excessive alcohol or smoking will have an effect. Planning for your retirement means making changes now that will improve your health, and possibly even reverse some of the damage you may have incurred. Losing weight, improving your diet, quitting smoking and increasing your exercise will improve the quality of your retirement, and keep you mentally and physically younger than your years.
Seeking expert help both throughout our working lives and as we hit retirement age is a sure way to take the dreaded stress and worry off our shoulders when we hit our 60s. Finance Monthly
Once you have assessed your financial need for retirement, taking into account at both essential expenditure and discretionary expenditure, you will need to put a plan in place to ensure your long term plans are fully resourced and attainable. Whether you are relying on a state pension or have investments on the stock market, failure to make an informed plan at this stage could risk your pension freedom and lifestyle choices.
Seeking independent financial advice on your pension pot can help you retire in confidence, whilst also helping you focus your aspirations and goals. Speaking to a financial advisor regarding your savings for retirement and investment returns is a job best done sooner rather than later.
“You may be retired, but you can still live with meaning, purpose and energy.” Hyrum Smith, Author, Purposeful Retirement
Instead of marking the end of something, retirement can actually be the start of new opportunities and challenges. Why stop working even if you want a change from your previous occupation.?? Alternatively, with time on your hands, years of experience and a wealth of knowledge, your skillset can be put to good use. Consider a change of direction – retirement from your current job doesn’t have to mean retirement from employment. Not only will continuing to work be good for your bank balance, but it is also good for your mental health.
Alternatively, charities and organisations welcome retirees and depend on this valuable, free workforce to strengthen their offering.
Without a plan, filling seven days a week can be a challenge, especially for ambitious adults used to working.
“Plan ahead to avoid drifting later” Tim Bennett, Killik & Co (Wealth Management)
Choosing what work you want to do is a big decision. Ask yourself what you want from your working life? occupation. Are you looking for something vocational or a long term commitment? How much money do you want to earn, money or are you willing to volunteer?
Knowing the hours you are able to offer and the commitment you can provide to your next employer will help you in your decision making. Working on the skills you may need to achieve your goal may take time – start planning now and use the time you are working to build new skills for retirement.
Too often, people plan for their retirement without factoring in how they might be called upon to help out their adult children, aging parents and siblings. – Merrill Lynch
Most people will socialise at work. Your employer offers more than just a salary; they often provide a range of social opportunies.
Most of these dry up once you hit retirement age. Retirees have to find alternative ways to maintain social connections to avoid becoming isolated.
“People tended to become lonelier after retirement if they had little contact with friends before retirement” John Cacioppo, author “Loneliness: Human Nature and the Need for Social Connection”
Expanding your social network before you stop working, is one way to maintain some of those relationships in retirement. Finding new social connections outside of work with people who aren’t associated with your job, will give you a new set of friends with whom you will have a common interest. These friendships will last into your retirement, but start making the connections early.
If you have retired, you will suddenly find you have up to 40 or 50 hours of free time. You may be busy working through your bucket list and catching up with family, but once this has happened what next?
“When a habit begins to cost money, it’s called a hobby” Proverb
Hobbies are an important part of every- day life, and even more so in retirement. They help you relax, make social connections and learn new skills. Hobbies can improve physical and mental well-being, and can fill a work-free week with conversations and fun. Establishing a hobby or an interest before you retire, will ensure you plan an active and productive retirement. Budgeting for your new interest is important, and consideration when planning your retirement.
People who have enjoyed a full and active career can often find it difficult to accept that that part of their lives is over. They will experience an almost grief like sensation, entering their new phase of life with despair. The demands of their job may have meant they have had little time to prepare, other than assessing their retirement income or deciding upon their retirement age.
“As you plan for retirement, think about what it looks like. Talk to your friends. Write about it. Create a storyboard. Be imaginative. Your financial plans and your day-to-day retirement plan should go hand in hand. This is your retirement identity.” Diane M Manuel, Urban Wealth Management
Understanding that you will go through a range of emotions is key to preparing for retirement. Setting goals, creating structure and building friendships ahead of retirement will ensure that the transition is as smooth as possible.
“Thirty years ago, retirement was mostly covered for you. Today, you need to plan for yourself” Market Watch
Retirement planning has changed drastically over recent years.
Fewer people have assured the guaranteed income of a final salary pension, and many will wait longer to get their state pension. People are living longer and can achieve more during their retirement. Planning your retirement should start when you have your first job; your goals and how long you have to achieve them are considerations that need to be considered as soon as possible.
You can plan and prepare for retirement using my bespoke coaching programme. I can help you address the issues you need to think about when planning your retirement, improving your emotional flexibility and increasing your joy in life, ahead of and during retirement.
To find out more, contact me on:
T: 020 8133 9495
E: info@janeparslow.co.uk