Retirement can be an exciting time. However, there are a plethora of different things that you’ll need to consider before you approach your last day at work. Whilst you may have had an active lifestyle with a busy schedule and a demanding job requiring your attention, this period allows you to take a step back and withdraw yourself.
The age at which people retire is slowly creeping back, with an increasing number of people choosing to work reduced hours instead of leaving employment altogether. However, whenever you decide to take some time for yourself, it is important that you are prepared for what lies ahead.
One of the most crucial things to have in order before you consider retiring are your finances, as it is almost inevitable that your situation will be affected. Although you may have invested in a pension scheme, as well as stocks and shares, it is vital that you have a thorough understanding of the money you have saved and your entitlement to it. Prioritising your money management in the decades before retirement is the most efficient way of doing this, but there are a few different things that you can do in the immediate run-up.
When you retire, most people will look at their pensions to provide them with a sustainable source of money. For some, this will be a scheme that you have invested in over time, perhaps with a contribution from your employer. However, it is also possible to have independently set up one, paying cash into it when you see fit. There are two main types of pension available to you, a defined benefit and a defined contribution, the former which provides you with a set income for life and the latter a pot which you build up over a series of years.
A defined benefit scheme is also often referred to as a final salary scheme and is something that your employer provides you with. This is rare to come across, as they are funded by your workplace, but are extremely beneficial once you reach retirement age. Alternatively, a defined contribution pension is something that you opt into, placing money into it monthly over an extended period of time. These are frequently offered by your employer, who will also contribute to it.
One of the biggest advantages of a pension is that you can benefit from tax relief for any contributions. Moneywise, advise that “basic-rate taxpayers – who get 20% relief – pay £80 into their pension and end up with £100 to invest. Higher-rate taxpayers get relief at 40%, while additional-rate taxpayers get 45%, meaning they only pay £60 and £55 respectively to put away £100.”
Pensions are also a useful tool if you have a partner, as once you reach the limit on yours, you are able to pay into their pot. With the current limit on a pension £1.3 million, you can add up to £2,880 a year into a family members account who is currently unemployed. As this amount also benefits from tax relief, this will become £3,600 towards their own retirement fund.
After distinguishing the types of pension that you have, it is then useful to work out how much money you will be entitled to, as this will give you a fantastic gauge on your future expenditure. You can do this by visiting the government agency website, which will provide you with a forecast, as well as tips on how you can increase this.
Something else which is worth considering is how you’re going to take your pension – are you going to have it in a lump sum, or are you going to opt for monthly payouts? Monthly options are the most popular, as it allows you to stay on top of any bills that you may have to pay. This can be useful if you have yet to pay off your mortgage, or if you have any debt that you need to pay off.
Throughout your life, you may have been encouraged to invest in different things. This can vary from stocks and shares to premium bonds, where you can earn interest or a dividend income. As you approach retirement, this is the perfect time to take a look at all of these and be aware of what money you have in which product. Condensing your investment portfolio, you will be able to keep track of your additional income, allowing you to make the most of it.
One of the most important things to do before you retire is to set a budget. Monitoring your cash inflows and outflows, this will highlight areas where you need to cut spending and allow you to see where you have some spare cash. The Money Advice Service has a useful tool which guides you through the budgeting process, with a worksheet available for you to print off if you’d rather jot down your expenditures.
For a more comprehensive budget, gather your last 12 months bank account statements. Go through these with a fine-toothed comb and create a colour-coded guide for things such as utility bills, food, non-essential obligations and miscellaneous costs. This can be a great activity if you are unsure of how much you are typically spending each month.
Debt can be debilitating at any period of your life, but when you are no longer earning a monthly income, you can start to worry about how you are going to pay it off. High credit card bills are one of the most common examples of debt but can easily be avoided with some strategic planning. The key to being in control is to start as early as possible. Although writing a budget will help you decide how to spend your money once you have retired, it will also allow you to work out where you can afford to start paying off your debt.
Look at where you owe money. Things such as credit cards take monopoly in this situation over your mortgage, as these have high interest rates and can damage your credit score. Start with attempting to pay these off first. Set up a standing order from your bank account to make payments towards your credit card each month, as having this automatically come out of your bank means that you won’t forget to make the payments.
If you are worrying that you will struggle to pay off any debts, then consider working part-time before fully committing to retirement. Not only will this help you have extra income for a couple of extra years, but it also comes with a wealth of other benefits, including socialising.
Your health is one of the most important things to consider as you age. As you enter retirement, it may be easy to adopt a sedentary lifestyle, but this can cause a number of different problems. Improving your health doesn’t mean that you have to have an entire lifestyle overhaul, but means that small, necessary changes need to take place to allow you to stay healthy.
Your diet can have a huge impact on your health and wellbeing, and while it may be tempting to indulge on high-in-calorie meals to avoid cooking at home, it can have a detrimental impact and put you at risk of developing a number of different illnesses. Retirement is the perfect time to learn how to cook if you have previously avoided it.
Reacquainting yourself with the kitchen, it can develop into a hobby which can keep you occupied and loneliness at bay. Investing in a series of healthy cookbooks, such as Eat Beautiful and The Healthy Meal Prep Cookbook will provide you with ideas that you can follow along. Cooking needn’t be daunting, so have recipes to follow will take away the stress.
With your diet, introducing a plethora of fruit and vegetables can give you a boost of vitamins and minerals. According to Retire Happy, your body needs "A, C, D, E, K and eight B vitamins (thiamine, riboflavin, niacin, pantothenic acid, biotin, vitamin B-6, vitamin B-12 and folate)." One of the easiest ways to ensure that you are getting the right amount of these is through a multivitamin, but you should always consult with your doctor before trying something new. However, broccoli, carrots and spinach are fantastic alternatives.
Studies have suggested that your health begins to decline after you retire, as you start to socialise less and spend fewer hours outside of your home. The study by Yujie Zhan from the University of Maryland and California State University, published in the Journal of Occupational Health Psychology found that “retirees who continued to work in a bridge job experienced fewer major diseases than those who were fully retired”. If working part-time is not something that you would like to do upon retirement age, you should make sure to stay on top of your regular health check-ups to minimise your chances of getting ill.
Exercising is one of the best ways to stay healthy and mobile. Not only does it decrease the chance of weight gain, but does wonders for your mental well-being, allowing you to de-stress and improve your quality of life. An important thing to consider when it comes to exercising is that a little goes a long way and that you should not consistently push yourself out of your comfort zone if you feel that it may result in injury. Starting with frequent but regular light walks is a good way of introducing yourself to exercise, particularly if you have lived a sedentary life up until this point.
Low-impact exercise, such as swimming, is good at relieving symptoms of arthritis, as 90% of your body weight is supported by the water. Additionally, it helps you to improve the strength of your muscles whilst having a reduced impact or strain on your joints. If you haven’t swum in a while, it may seem challenging, but there are often retirement classes to help people pick up their ability.
As you age, you may also find that you are not as strong as you once were, so engaging in a sport such as yoga or Pilates can be a good option. Yoga has lots of benefits, including improving your mental state by allowing you to relax. It also improves your core strength and by regularly practising yoga it can help to lower your chance of falls and improve your focus.
As you enter retirement, you may struggle with the changes to your lifestyle. Escaping the working routine that you had become so accustomed to, you may start to wonder how best to spend your time. This freedom can be fantastic, however, as it allows you to try new things, tick items off your bucket list you’ve always wanted to achieve and spend more time with friends and loved ones.
If you have enjoyed the social aspect of working, you may find that suddenly having a lot of time to yourself can be lonely. This is common amongst those who have retired, as you may feel as though you have lost your sense of purpose. Local community groups are a great way to make new friends and ensure that you spend time socialising. These can range from groups about gardening to friendship centres especially formed for older people. Finding a new group to immerse yourself in can help you to find your sense of self and reduce any negative emotions that you may have been experiencing.
Another good way of socialising is through volunteering. This can be as flexible as you’d like but provides you with the benefits that you may miss through working. There are a number of different charities that would appreciate your time, whilst you enrich your own life by making a difference to your community.
There has never been a better time than retirement to discover a hobby. From something relaxing and low-impact such as crocheting to improving your fitness levels by rock climbing, there is something for everyone! Having a hobby is a great way to develop new skills and keep you busy, as well as giving you the chance to try something that you’ve always been interested in.
This news article is from Companion Stairlifts. Articles that appear on this website are for information purposes only.