Planning Ahead: 5 Tips On Planning for Later Life
About half of us fear that we won’t be able to afford to retire – with rent, bills and everything else in life making it near-impossible to save enough for our retirement. That stat, from the Joseph Rowntree Foundation, paints a worrying picture. With so many people fearing the future instead of looking forward to their later years, it’s time we all did more to plan ahead.
Easier said than done, right? Maybe, but here are five tips we should all take on board to plan for later life…
The earlier the better
It’s never too early to think about your pension. Too many people put this off and think it’s a matter for old age. Yet, while claiming the money from your pension might be something you do in your 60s, the bulk of the work building up this pot has to start much earlier – making it a key consideration for everyone of working age. The earlier you start the more you benefit from interest too.
Understand what your pension means
You need to ensure you know what your pension pot will deliver and how to top it up if you want to improve your income. We’ve become savvy at shopping around for energy bills or getting good deals on mortgages – that now needs to be extended to pensions. It might help to think about what you’d like your income to be. That way, you could calculate the sum you’d need to set aside to deliver this income and then be able to work out what this means for monthly savings throughout your working life. Don’t forget to factor in your state pension too when calculating your post-work earnings.
Property plays an important role
Where do you plan on living when you’ve retired? Selling a big family house and downsizing can be a crucial part in your financial plans, freeing up the funds to buy the home you want to live in when you’ve given work up and a little more to spend during retirement. Make sure you keep track of the relative values of any properties you plan to sell and buy.
Tax
Jonathan Watts-Lay, a director of Wealth at Work, points out the importance of considering tax when it comes to your retirement. He notes that it makes sense to try to avoid paying more than 20 percent tax if you can and stresses that tax-free savings accounts such as ISAs can complement your pension and help you to make the most of your money. Remember, you don’t just have to stick with a cash ISA either; share dealing ISAs can deliver better returns on your tax-free savings pot.
Debts
Finally, it’s important to try to clear any big debts you might have before you finish work. Think about this when it comes to setting an end date for your mortgage or any personal loans that you might take out. Getting these off your back will stop you from having to use up any of your pension pot on servicing debt.
*This is a collaborative post.
Oh my gosh, I’m so embarrassed to admit that I haven’t really planned ahead much. I need to utilize these tips ASAP and get my life in order.
These are truly great tips that everyone should be doing. Especially clearing debt before retirement…. So important!
I am only in my twenties and I am planning ahead for retirement. I have a couple of investment funds and am in the process of paying off my school loans, I am almost there!
I love all of these essential tips. This advice is something I’ve learned the hard way. I’m sure it will be useful to many! Thank you for sharing.
This is really helpful and inspires me to be prepared not just myself but also for the whole family. Thanks for sharing dear.
These are such good tips. As you rightly pointed out the earlier the better. Infact I like to have a Plan B ready too, incase Plan A didn’t work out as we wanted it to.
This is very useful and helpful information we should all keep in mind.
Good idea. Better to prepare for the future of yourself because we will never know whats next
Very important topic. You have to think about when you are no longer working if your income will be enough.
Some very useful information there, I really need to start thinking about things like this! This is SUPER critical especially when we arent getting younger and I have kids. Thanks for sharing.
It’s never too late or too EARLY to start planning
honestly, I’m not prepared about retirement plan. thank you for posting this, I’m awake now. lol
I think taking care of debts is a great thing to think about before “later life”. These debts turn over to family in some instances and I don’t think that is fair to put on any family member.a
Planning early is definitely important. You never know when the end might come or how long until the end actually does come. I have been saving since I started working full-time at age 22.
Great info. My husband has a pension so I need to learn more.
This is very useful. Thanks
There are some really great things to think about. It’s so easy to just keep putting it off until “someday”.
Very helpful post! Thanks for sharing these tips; I’ll look into them!
Really helpful information, thanks! These are questions many of us fail to consider before it’s too late.
Thankyou for all the tips. I just realised that I have to start from now and will suely look into the options that you have presented.
Some very useful information there, I really need to start thinking about things like this, after all none of us are getting any younger.
Don’t leave it until it is too late is good advice indeed.