ABCs of retirement planning: 3 Steps to retiring on your terms

Our local financial advice firm in Cheltenham was launched with the prime purpose of helping people retire in the way they want to.  Everyday life often gets in the way of long term plans and the pensions world can be tricky to get your head around, but the basic steps to a retirement plan are always the same:

1)     Know what you’ve got:

Most people have old pensions that they don’t know how much is in, where it is invested and how much they’re paying for the privilege.  Get your statements together and know how much you’ve saved. 

But also think about what else you’ve got.  We’re all due a state pension and the gov.uk site has made it very easy to get a projection of what you’ll get.  All other savings and investments are part of your retirement plan too.

Property is also becoming very important to your retirement plan.  Many people reach retirement with little savings but an expensive house.  You can access that money by down-sizing or if you don’t want to move you can consider equity release.

2)     Know what you will have at retirement

Now that you know what you’ve got, you need to use your crystal ball to work out how much you will have at your retirement age.  There are lots of tools and planners out there on the web that you can use.

Pick your retirement age, put in how much you are saving to your pension every month and pick the type of investments your pension is in. 

This information will spit you out a value and also a potential retirement income that it will generate for you.

3)     Know what you can do to get more.

The answer to step 2 is often not enough to fulfil our retirement dreams.

But if you plan early enough in advance then you can greatly affect the outcome.  You can pay more into your pension, and make sure you’re maximising tax relief and any contributions your employer is putting in.

You could put your retirement date back, but that is rarely the answer people want to make. 

You could invest your money in a fund that is likely to return you improved growth over time.

Many people are also considering part time work in retirement to help fund some pocket money.

I’m a pensions and retirement expert and would love to talk you through your options..  Parker Financial Advice are independent (IFAs) based in Cheltenham, who choose products from the whole of the market.  We want to be your trusted advisors.