Start preparing for your post-working life with these six top retirement planning tips.
If you are to have a comfortable retirement, it requires some planning. Merely having a pension is insufficient, and there are other components to consider in your retirement planning. Avoid financial mistakes, make use of regulated financial advisors such as Portafina before you jump in to big decisions that could affect your future.
You can exercise your creative side when it comes to retirement planning. However, you may struggle to get started making your plans. Therefore, here are six top retirement planning tips to get you going.
Retirement planning tips
Your retirement could be imminent, or it may be several decades away. Either way, you can benefit significantly from following these basic retirement planning tips. So let’s get stuck into them straight away.
Deal with your debt
Dealing with your debt is tip number one because failing to do so can harm all your other retirement plans. If you are paying back interest on your loans, you will have less disposable income available towards your retirement funds.
When clearing your debts, start with those obligations that have the highest interest. Doing so will free up more money with which you can remove your lower interest debts.
Get free of your mortgage
Although a mortgage is still categorised as debt, it is different from typical consumer loans. However, it is still a great idea to become free from your mortgage.
Having the security of owning your home reduces the stress of finding rental or mortgage payments each month. Such a burden is one of the most considerable financial obligations most people face.
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Consider your investments
Once you have dealt with your mortgage and consumer debts, you have the opportunity to do something a bit more optimistic. With the money you save from having no more interest payments to make, you may consider making some investments for your future.
If your retirement is imminent, you may well have some investments already. These may include some or all of the following:
You may well have set these investments up decades previously. Therefore, you must consider those you have to see where they sit in your retirement plans.
Develop a financial plan for retirement
Developing a financial plan for your retirement will bring all of these preparations together. Part of your plan should include an assessment of your income and expenses to create a realistic budget.
Budgeting will help you maintain your desired retirement lifestyle without having to take on any further financial obligations. When creating your budget, you must be honest with yourself. For instance, if you know that holidays are something you can’t do without, you need to factor these into your monthly spending.
Continue working part-time
If your financial planning informs you that you may not have the income you require for your retirement lifestyle, you might have to consider continuing to work part-time. Although this may not have been in your initial thoughts, there are benefits to doing so.
Continuing to work part-time after you plan to retire means that you can continue contributing to your pensions and other retirement funds. It also provides you with the opportunity to work at something that you enjoy rather than just doing it for financial reasons. For instance, you may have a hobby that can generate some income by working at it a bit harder.
Get mentally prepared
Even if you’ve made considerable plans and preparations for retirement, you will still likely find retirement to be completely different from your working life. Predicting exactly how you will cope with retirement is virtually impossible. However, one thing is for sure, you will have to deal with a certain element of change, so you should get mentally prepared for it.
Planning for your retirement will give you the best opportunity of making this a comfortable phase of your life. It also helps you deal with the changes that come with retirement.
With change comes some challenges, and these provide you with an opportunity to learn more about yourself. Your retirement is a new phase of your life and a great time to be alive. Therefore, you should accept the changes rather than fight them so that you can enjoy your retirement to the fullest.