Planning for Retirement

A hand holding a coffee mug in front of a road, pine trees, and river in Vancouver

How do you do this? Do you do it or just let it happen? Nowadays as we tend to live longer – and be more informed regarding our possible retirement dates/choices/pensions it is most likely that we do some level of planning.

For me there were 2 main areas to consider – finance and activity. As with many women (and now increasingly men) I had career breaks to have children, then worked part-time for several years whilst they were young. For me this was definitely the correct path to take and I enjoyed it tremendously – the best of both worlds.

Although it did impact on my career progression in the long term, I also had opportunities that may not have been open to me if I had followed the normal signposted career pathway.

Aside from the impact on the occupational pension because of working part time there was also the change to the State pension and retirement age. I had started work thinking that I would be retiring at the age of 60. Whilst in my 50’s I was informed by the DWP that my eligibility to draw a state pension was now 66!

Added to this and, again like many others, I had my children in my later years rather than my 20s as was considered the norm. My last child was born when I was 43 and so I had to take his need for support during his ‘Uni’ years into consideration as I wanted to offer him the same level his sisters received.

So, first I needed in-depth information around what my pensions would be and the out-goings we would have. Whilst I acknowledge that as one part of a couple this is easier than as a singleton I am very independent and have always ‘paid my share’ and had no intention for that to change.

Once I had information relating to my occupational pension (for example https://www.nhsbsa.nhs.uk/nhs-pensions ) and my state pension estimate (https://www.gov.uk/state-pension ) I was able to calculate my income. Then to calculate the out-goings, obviously there was to be a level of guess work involved due to such unknowns as inflation, gas/electric/council tax price rises etc.

Once these are known it should be possible to understand what level of planning is required and enable you to identify a possible retirement date and how to work towards it. Obviously the earlier this is undertaken the better prepared one is.

I know that I had no intention of retiring at 60, I felt fit physically and mentally to undertake my role yet 66 seemed too late to be up at dawn every day. So, I decided I would leave at 62 (in fact I left at 63, but that’s a different story). Having calculated the monthly income of my occupational pension I decided to consider that figure my income for the last two years of my planned employment and save the difference.  Whilst not everyone would be able/wish to do this for me it provided a saving pot which is contributing to a massive renovation of the house and demonstrated that the level of the pension was adequate to cover my outgoings. So far so good.

There are many websites offering much sounder financial and investment advice, some of which I read when planning my financial future, others I have discovered since.

I have listed some below:

https://www.moneyadviceservice.org.uk/en/articles/manage-your-money-in-retirement

https://www.gov.uk/plan-retirement-income/get-financial-advice

http://www.laterlife.com/financial-advice/financial-advice-retirement.htm

https://www.thebalance.com/retirement-blogs-worth-reading-2388632

https://theminimillionaire.com/personal-finance/30-uk-based-personal-finance-blogs-you-need-to-follow/

Another consideration is looking at ways of reducing spending – a different way of managing financial concerns and I am preparing a ‘post’ relating to Thrift/Frugal living as there are so many ideas and hints that I thought it warranted its own space. (coming soon…)

Yet another option – is re-employment. Don’t stop working, change the day job – this could be part time, short term projects, turning an interest into income or simply job-sharing the current job. I have friends who have ‘re-invented’ themselves and I plan to invite them to write their story, hopefully it will give you some enthusiasm to review your skills and consider how they can be utilised in a different way.

When the scenario is not typical.

What I had described had been most likely the average path taken towards retirement in respect of relationships, pensions and mortgages. ‘What about the folk whose ‘normal’ turned out to be different?’ I have been asked.

Divorced, widowed, children late in life can all impact on planning the future. It is also possible that many people re-mortgaged the house to release funds or because of divorce had to start again. In these situations the financial considerations are obviously different and may, in fact, require retirement to be delayed.

An alternative is to consider re-employment in a part time role or a less demanding job. You may be pleasantly surprised at how many employers are keen to employ experienced people on a part time basis – the skills and organisational knowledge is retained. As said earlier I will shortly be uploading an article focused on how to utilise your skills – in similar or different industries than you once worked in.

Each person’s story is individual to their circumstances so all I can offer is a general guide – sit down with pen and paper. Having listed the incoming pension alongside the known and anticipated outgoings you will know if it is manageable. If there is an imbalance – what are your options? Will you be receiving a ‘Lump Sum’ as part of your occupational pension? If so, could that be used to clear some of the outstanding costs? For example – if there is a mortgage would the Lump Sum’ be enough to clear it? Or – if you used some of the money to clear part of the outstanding mortgage would paying the remaining as a monthly payment be a possibility, that way leaving you some funds in the bank in case of emergencies.

It may be that there is no ‘Lump Sum’ or it is insufficient but leaving your job is the decision you have made. Then it is time to look at the alternatives and seek financial guidance. https://www.citizensadvice.org.uk/debt-and-money/getting-financial-advice/  The Citizens Advice Bureau is a good place to start.

Finance is, of course, not the only consideration when planning retirement as the change in your life is much wider than that and so hopefully, again with help from friends, I will be posting articles to give you as wide a view as possible of all the angles and opportunities.

Also – happy to upload your personal experience if you wish to share – send an email, I’ll make contact (perpetually49@gmail.com)

Photo Acknowledgements:

Yoga –  Photo by Marion Michele on Unsplash

Coffee Mug – Photo by Matthew Sleeper on Unsplash

Featured Image – Photo by Glenn Carstens-Peters on Unsplash

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