How To Successfully Plan For Retirement

Jane Wardle

Written by Jane Wardle on January 31, 2019

Updated August 7, 2019

Older couple planning for retirement

One of the most eye-popping surveys of the last few years shows that millions of people across Britain face a real tough future in their retirement. According to the Financial Conduct Authority, 31 per cent of adults in the UK are living without private pensions of their own.

Without a private pension, these individuals will need to rely on what the state provides come retirement. Even with the maximum weekly £159.55 pension by the state, it’s not available to everyone, only past contributors of national insurance who meet specific requirements.

However, despite this, you do not need to rely solely on the state or simply on the limited kindness of family members and well-wishers, as long as you start preparing accordingly for retirement.

Retirement preparation in your 20s

Those in the twenties see retirement as being a long way off at a time that one is on proper employment for the first time earning a good salary. At this level, financial objectives can be prioritised, such as student debt repayment, credit card and bank debts, living expenses before saving what remains.

If you’re in your 20s prepare for retirement successfully by putting your focus on repaying debts, opening facilities such as ISAs and saving as much as you can afford. Tax-free ISA is arguably the best for those in their twenties to build financial resources that’ll come in handy in future.

Retirement preparation your 30s

Your 30s is a busy period in terms of finances. It’s also a time getting married and family comes to mind and even purchasing a family home for the first time. Prepare well by taking stock of debts you still owe, their costs and find the perfect solution of addressing them.

In this decade you must strike a perfect balance between debt repayment and saving for retirement. Explore all options available for saving for the future available to you. Know whether your employer provides a pension scheme and what the contributions levels are so you can maximise its potential.

Even with a pension, it is wise to take a few risks and invest in different areas to have streams of income in the future such as shares that usually pay well in about three decades and outperform most saving accounts within that time. Essentially, relook at your expenses and debts, join pension scheme if you haven’t and think about other streams of investments.

Preparing for retirement in your 40s

In your 40s you should definitely have some retirement amount saved in any form such as personal or company scheme or ISA. However, even if you’re yet to start there’s still time. The 40s decade is a really critical period in retirement planning. You can’t wait any longer. You should have dealt with debts and improved your earnings.

As a result, you should be able to start putting away some good amount of money towards a better future for yourself. It’s also that time to come up with a retirement age and decide on retirement lifestyle you intend to have.

At least you should have an ISA going at this time. If you’ve not thought hard about saving you really must in your 40s, incomes usually peak at this time and rather than live lavishly and spoil yourself, dedicate more funds to retirement arrangements and pensions.

Retirement preparation in your 50s

In your 50s you really must be serious more than ever in retirement planning. When it comes to retirement and preparing for it, the 50s decade is the most crucial of all. Think about the retirement date you’ve in mind and use it as a guide to calculate the income you need in retirement.
Evaluate your pension and position the pension fund directed by the income option you’ve in mind for the future.

In case you intend to get an annuity with retirement, start phasing volatility out of the pension fund to lower the threat of a dipping value just before you start receiving benefits. Money in risky equities should also be put away in secure and safer cash investments. If you already have a good pension fund by now consider SIPP (Self Invested Personal Pension) for more control in its investment. Do maximise on pension contributions while striking a balance between support for your family and preparing for the future.

Retirement preparation in your 60s

In your 60s you should now be thinking about producing income and cash in your retirement. You should have put debt matters in order and paid off or close to paying off a mortgage and balancing support for your family if you’ve one. It’s also a time you must decide whether to keep working and contribute more to your pension considering employers have been advised to suspend forced retirements at 65.

At this point in your age you’ll be making far-reaching decisions with a huge impact on your retirement life and finances. Speaking to a financial advisor independently should be highly considered.

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