It is never too early to start planning for your retirement but it definitely can get too late, especially if you want to enjoy your twilight years in comfort.
If you don’t know where to start with creating a retirement plan and are worried about how you will manage financially, then the guide below is just what you need.
Read on to discover how you can plan your retirement in just four simple steps with top tips on how to make the most out of your savings.
Step 1: Determine how much income you need
The first, and arguably the most important step, you need to work out exactly how much income you need to come in to enjoy a comfortable retirement.
While many different figures are being bandied about in the media, the amount you need depends on what kind of lifestyle you want to achieve. When determining how much you need, make sure that you factor in essential expenditures and your discretionary income.
Step 2: Work out how much income you will have
Now that you know how much income you would need to cover your living expenses, and for disposable income for when you retire, the next step is to determine how much you are likely to acquire from your pensions.
Consider how much pension you will get from the state, as well as any private pensions you are entitled to. Don’t forget to also factor in your savings and any investments that you have.
Step 3: Assess your options
You should now know how much you will have to live on when you retire. If this is not as much as you hoped it would be, there could still be time for you to increase your contributions and save more money.
You may also want to consider working part-time when you retire to bring in more income or rent out your home or a room in your home.
If you don’t want to have to do either of the above and you are concerned about how you are going to manage your income when you retire, then it can be a good idea to hire an advisory firm for wealth management that will be able to advise you on all aspects of financial planning for your retirement.
Step 4: Make a retirement plan
Once you have a better idea of how much money you need to retire and how much money you are likely to have, the final step is to sit down and make a retirement plan.
As mentioned briefly at the beginning, it is never too early to start thinking about your retirement or to craft a retirement plan. While you can do this yourself, it is a lot more prudent to enlist the services of a financial advisor or estate planning attorney who will help you make the most out of your savings and investments and be realistic about what you can afford.