A Comfortable Retirement Requires Planning. Here Are 5 Steps Towards A Successful Retirement Plan.

Realistically delving into your finances can be daunting. However, to create a successful retirement plan, you will have to get into the nitty-gritty of your money management. Doing so earlier rather than pulling it off will help you achieve a comfortable retirement. Money management and planning for the long term financial future is important. Speaking to a specialist and taking on expert advice is helpful. Check out Portafina.

Here are five steps towards a successful retirement plan.

Step 1. Organise your finances.

A comfortable retirement in years to come means getting your finances organised today. Consider separating your money into different spending pots. Also, create a realistic budget and ensure you maintain it. Establishing sound money-management habits today will review significant benefits when you retire.

Step 2. Calculate your potential retirement income.

A significant proportion of your retirement income will likely come from pension funds. You may already have several of these in the form of workplace pensions. However, if you have changed jobs frequently, you can lose track of these. You must track down any lost or misplaced pensions as you could have thousands of pounds within these plans, and you will need that money in retirement. The Pension Tracing Service on the gov.uk website is a good starting point to track all pensions.

While you are on that site, you should request a forecast of your likely State Pension. This benefit is an excellent supplement to your retirement income. Still, it’s unlikely to be sufficient to support you on its own.

Also, consider other forms of income you may have in retirement. These could include investments, rental properties, small business shares, or part-time work. Regardless of how you receive your retirement income, you should be mindful of the tax implications.

Step 3. Be a bit selfish.

When it comes to your retirement, you should put yourself first. Do you have a limited time to save for your retirement, so starting as soon as possible is essential. By all means, support family members if they need it. 

However, 20% of Brits claim that providing financial help to family prevents them from making a reasonable provision for their retirement. If you are one of these people, you may have to become a bit more selfish and put your retirement first. After all, the more comfortable you are in retirement, the more you can help your family. Therefore, have an open conversation about your level of financial support. Doing so will avoid disappointment and awkwardness in the future.

Step 4. Visualise your retirement lifestyle.

Having a clear picture of how you want your retirement lifestyle to look will help your planning towards it. Of course, it’s challenging to visualise how your life might be when you retire, particularly if that is 20 or 30 years in the future. Also, it’s not easy to put a figure on how much that lifestyle will cost. 

However, painting a picture in your mind will give you an idea of what you want to achieve and how you want to spend your retirement. You can seek assistance from a financial advisor to help you calculate the costs.

Step 5. Understand your pension options.

You must understand your various options for accessing your pension funds. For instance, you may be able to take up to 25% in cash without paying any tax. Although this may seem appealing, you should be mindful that it could leave you short of income when you retire. Therefore, it is good to consult a regulated financial advisor before making any significant financial decision.