When you are approaching retirement, it pays to be prepared. A few years prior to your retirement, you should start to consider your finances and make sure everything is in order and taken care of before you finish working.
At Burton and Fisher, we specialise in wealth management in Lancaster, and we can help you to get your affairs in order before you retire. Here, we will show you some of the ways that you can prepare financially for retirement and ensure that you can support yourself throughout this next chapter of your life.
Understand Your Likely Retirement Income
As you approach retirement, one of the most important things you must consider is how much your likely retirement income will be and whether this amount is feasible for you to live on.
Requesting a State Pension statement is a good place to start, as this can give you an approximate estimate of how much you can expect to earn from your State Pension, which is based on your National Insurance contributions. You can request this via the GOV.UK website.
You should also work out how much you may receive from your defined benefit pension and trace any lost pensions to add to your anticipated retirement income. At this point, you should also consider any savings or investments you may be able to use to fund your retirement.
As you consider these figures, it is a good idea to consult with an independent financial adviser, who can help you to calculate your likely retirement income and answer any questions you may have about your pensions.
Draw Up a Budget
When you retire, the areas where you spend money are very likely to alter. The money you spend on working costs, such as travelling into work and purchasing work clothes, are likely to go down, however your living and leisure costs may go up.
When you are drawing up your budget for retirement, consider how your spending may change in the future and how this may reflect on your disposable income, as well as your ability to stay in your current home and maintain your favoured lifestyle.
Clear Your Debts
You will want to retire with as little debt as possible, as fixed repayments can account for a significant amount of your monthly income.
In the years leading up to your retirement, you should consider reducing and eliminating debts such as mortgages and car repayments, using any available income to pay off these expenses. If you are unsure of how to approach this, consult your financial advisor.
Retirement is a great new chapter of life, and by making sure you are financially prepared, you can ensure that your future will be as bright as possible. If you require financial advice, Burton and Fisher can help. We provide a range of financial services for a variety of circumstances, and we can certainly help you towards a better financial future. For more information, contact us today by calling 01524 416511.