“He was only two days from retirement!”
You’ll hear that old cliché in almost every cop film as some old buck on the police force meets a sticky end in a plot-altering heroic act. They’ll bite the bullet capturing that one thing that eluded them after 50 years of coasting on the job – true honour.
But that sticky end means they missed out on all the complications of retirement that we normal, non-action film participants have to suffer. Indeed, if you’ve not prepared for those autumn years, your bank account will be hobbled by the meagre sums of a state pension and little else.
Yet, having the right savings, according to finance site This is Money, could let you “upsize” your property and live those final years in the location of your dreams.
So what preparations should you make to ensure your bank account stays heroic during your final years?
Tap into your home
If you want to feel safe and comfortable during retirement, you may need more of a financial safety net than you currently have. One way to get those finances is to tap into your home. Its value, or equity is available to borrow against through a home reverse mortgage. But, before agreeing to a traditional mortgage, consider signing a Jumbo reverse mortgages instead. It is a loan specially designed to help you when you retire by letting you use the money care-free for many years. You can even select how you want to receive your reverse loan payments. If you select monthly installments, you will receive monthly funds. That will somewhat simulate the paycheck you no longer receive for working.
Prepare for the end
Those decades speed forward in a surprise, and soon you’re staring at your weathered, 80-year-old frame – you were certain you were 60 just moments before.
Time catches up with us all. But, at the very least, you can be prepared with prepaid funeral plans to unburden any financial strain from your family.
With inflation raising the price of funerals every year, a one-off payment from your next of kin after you pass could leave them circling a drain of debt. But with a funeral plan, you’ll be able to make a series of payments that won’t break the bank, ensuring you’ve got that final, inevitable eventuality covered.
Don’t suffer rainy days
Despite the current low interest rate economy, there’s never a bad moment to be saving cash. To prepare for those times when your money is being stretched thin, set up a standard savings account and deposit a reasonable amount every month.
And if the coffers of your rainy day fund are brimming, you could even use some of it for a holiday.
Grab a pension NOW
With the state pension age set to rise, setting up a private pension fund (which you can access a whole decade earlier) will allow you to hit retirement earlier and enjoy those idle days for longer.
But to make the most of a private pension, you have to start saving as early in life as possible. It’s never too late to start, but it is a case of the earlier the better.
Indeed, Chancellor of the Exchequer George Osborne was recently praising those with the foresight to take out a private pension, stating that those “who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances”.
At the end of the day, having adequate dough for your retirement will allow for plain sailing. So don’t make two days before your retirement the time when you start planning.