The adage of “planning and preparation prevents poor performance” applies just as much to your retirement as it does to any other aspect of life. It’s likely to apply even more so, as you don’t get a second chance to retire. Unfortunately, however, many people put off planning for their retirement or, even worse, fail to make any plans at all.
If you fall into one of these categories, it may be because you are unaware of what to do to plan for your retirement. Therefore, we have compiled six of the best retirement planning tips for 2021. Regardless of when you retire, these tips will help you achieve a more comfortable and stable lifestyle when you finally give up working.
1. Clear Your Debts
Clearing your debts should be at the top of your priority list for retirement planning. Carrying debt into your retirement will severely curtail your lifestyle for a couple of reasons. Firstly, your income is likely to be reduced when you stop working, meaning you’ll have less money to pay your debts. Also, you may not be able to pay back as much of the interest each month, meaning your debts could continue to grow. Therefore, in the years leading up to your retirement, ensure your top priority is eliminating your debts.
2. Become Mortgage Free
Your mortgage may still be classed as a debt, but it is not in the same category as consumer debt, such as credit cards. However, it is still a great idea to get your mortgage paid off as soon as possible. Going into your retirement knowing that you own your home outright will not only benefit you financially, but it will give you an immense amount of security and satisfaction, knowing you have removed this financial burden.
3. Regularly Review Your Investments
If you already have investments, that is fantastic, as it means you have already started your retirement planning. However, simply having an investment is insufficient in terms of good planning, and you should regularly review them to check their performance. Your existing investments may include some or all of the following:
- Stocks & Shares
- Regular Savings
- State Pension
Review each one of these and, if needs be, take action to rectify their performance or set them up if you have not already done so.
4. Create a Financial Plan For Retirement
Hopefully, by reading this article, you will have the intention of creating a financial plan for your retirement. The best way to start this plan is to create a budget and start maintaining accurate records of your expenses. When you have done this, you’ll be better positioned to maintain your lifestyle in retirement without getting into further debt. It will also allow you to predict what type of investments you need to make to achieve your retirement lifestyle.
The important thing is to be realistic, including any treats or luxuries you know you cannot live without. There is no point in overlooking these things, as you will leave yourself short when it comes to executing your financial plan.
5. Keep Working Part-Time
It may not be what you initially intended for your retirement years, but working part-time can be a popular choice for many people in retirement. If you enjoy your work, reducing your hours may suit you and your employer. Also, part-time work in retirement allows you to try something new or perhaps turn a hobby or interest into a steady income.
6. Get Mentally Prepared
Regardless of the amount of planning and preparations you make for your retirement, you can be sure it will have a particular effect on you. It is impossible to understand how you might feel when you retire fully, so getting yourself mentally prepared is crucial. Considering your retirement and accepting it as a natural progression to the next stage of your life, rather than fighting against it, will ease the transition from working.
Your retirement is a time to enjoy your life and reap the rewards of a lifetime of work. Planning for your retirement and preparing as much as possible will allow you to enjoy the retirement you deserve. Hopefully, these six of the best retirement tips for 2021 will help you achieve that. Before looking at options for your pension, consider using a regulated financial adviser like Portafina or, view the info at Pension Wise.