Approaching retirement can be challenging and confusing. For example, you may find the idea of not working a daunting prospect and wonder how you will fill your time.
Additionally, you may be concerned with making sure you are able to live comfortably after giving up work. Fortunately, even if you are only a couple of years away from retiring, there are steps you can take to improve your financial situation. From working out your predicted retirement income to boosting your current pension, this article aims to help you manage your finances and assist you in planning before you retire.
Assessing Your Pension
An ideal starting point is to first assess and calculate how much you expect to retire with. Depending on your circumstances and the methods you have used to prepare for retirement, this could include adding up your private pension and State Pension, as well as any investments and savings you have.
You could take some time to sit down and look at your State Pension estimate, as well as any private pensions or other sources of revenue you may have. This will help you to get a clear picture of your future income.
Consider Changes in Spending
Your current lifestyle is likely to be very different from the one you will have after retirement. As such, when considering your financial future, also consider any changes in spending. For example, while you may be able to eradicate commuting costs, you may have to stretch your budget in other areas, including recreational activities and utilities. Accounting for these now will help to prevent unexpected expenses arising after retirement.
Reflect on Your Current Expenses
In addition to planning for differences in expenditure, it may also be a good idea to reflect on your current outgoings. While your fuel costs may lower when you no longer have to drive to the office, there are some of your expenses that are likely to remain relatively similar.
Calculating your basic living costs will allow you to understand the lifestyle your current pension could afford you, helping you to better manage and plan your finances for retirement.
Pension Boosting Strategies
In addition to assessing your current pension, altering spending and budgeting, there are numerous strategies you could utilize in order to boost your retirement fund. This could include increasing the amount you pay into your pension before retiring, considering extending your retirement age, or (depending on your circumstances) you may be eligible to claim tax relief on your pension from the government.