5 practical steps you could take this year if you want to retire in 2024
Posted onEvery year thousands of people retire. It’s a milestone that you might be looking forward to in 2024 with excitement. It’s also a life event that you may feel nervous about. Spending some time preparing for the next chapter of your life could mean you feel more confident about stepping away from work.
If you’re hoping to retire next year, here are five practical steps you could take now.
1. Think about your ideal retirement lifestyle
With retirement just around the corner, it could be valuable to set out what you’re looking forward to – what kind of lifestyle do you hope to enjoy?
As well as one-off experiences you’re excited about, don’t forget about your day-to-day life. Whether you have plans to join local clubs, transform your garden, or take care of grandchildren, daily activities can give purpose to your life and mean you enjoy retirement far more.
Setting out your desired lifestyle is important as it will influence the income you need to create from your pension and other assets.
2. Speak to your employer if you’re interested in a phased retirement
A phased approach to retirement is becoming increasingly popular. In fact, according to a YouGov poll, 62% of British employees believe a phased retirement would improve their work-life balance.
It could be a way to ease into retirement. If you still enjoy some aspects of work but want to strike a better work-life balance, it might be an option to consider. As you’ll be earning an income and may even continue to contribute to a pension, it could help your savings go further too.
There’s more than one way to phase into retirement. So, if it’s something you’re considering, it may be worth speaking with your employer about the options. You could:
- Reduce your working hours
- Take on a less demanding role
- Work on a consultancy basis.
3. Calculate your retirement budget
Once you know what your retirement will look like, you can start to understand what your expenses will be. This may help you create a realistic retirement budget that’s useful for assessing how you’ll use your assets to create an income.
As well as daily costs, you may need to factor in large, one-off expenses you plan to make, such as buying a new car or helping your grandchild get on the property ladder.
You may want to break down your budget into different categories, as this may be useful if you need to make adjustments. For example, separate your essential costs from your discretionary spending, or include a category for retirement dreams you could fund if your assets could provide an income that exceeds your expectations.
4. Review your pension and other assets
A good place to start when reviewing your retirement income is your pension. After all, you may have been saving into a pension throughout your working life for this purpose.
If you have a defined contribution pension, you’ll have a pot of money to turn into an income that will need to last the rest of your life. Balancing your needs now with long-term financial security is important.
While pensions are often the centre of retirement plans, you might want to use other assets too. From saving accounts to second properties, understanding how other assets could be turned into an income stream could mean your retirement lives up to expectations.
As financial planners, we can help you calculate the income your pension and assets may provide you during your retirement.
Don’t forget, the State Pension will often play an important role in retirement planning too. It could provide a reliable income for you to build a retirement budget on.
When you can claim the State Pension and how much you’ll receive will depend on your age and the number of qualifying years you have on your National insurance record. You can use the State Pension forecast tool to understand what you could expect.
5. Arrange a meeting with a financial planner
Retirement planning can be complex and there are lots of factors you’ll need to take into account.
After completing the above steps, you may still be uncertain about your retirement plan. Perhaps you’ve:
- Set out your dream retirement but are unsure if it’s realistic
- Reviewed your pension but don’t know what income it could sustainably provide
- Created a retirement budget but want to understand how inflation could affect your long-term needs.
Arranging a meeting with a financial planner could help you create a retirement plan that suits your needs, and you have confidence in. Please contact us to talk about your retirement goals and how you could turn them into a reality.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.
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