The 6 Essential Steps to Retirement Planning in Your 50’s

The 6 Essential Steps to Retirement Planning in Your 50’s

In your 50’s and bursting to write your resignation letter?

You’re definitely not alone after the last couple of years!

In fact, in your 50s you are perfectly placed to plan your escape with retirement planning.

With inflation rising by the day, you’re naturally worried about the effect on your pension and whether you’ve enough money to last your lifetime.

The good news is there is action you can take right now to secure your future. Here are six steps to get you started. 

Find out YOUR NUMBER – how much money you’ll need to live off comfortably.

This has to be your starting point so you know what income will maintain your desired lifestyle, cover your everyday expenses, and reduce the effect of inflation. 

First, consider your current living expenses. This will give you a starting point for estimating your costs in retirement. Remember to include your rent/mortgage, groceries, utilities, fuel, car costs, debt payments, phone/internet, insurance, personal spending money, eating out, clothing, home maintenance/refurbishment, sports/hobbies, gifts, charity donations, childcare, education costs, medical expenses, opticians, vet/pet care. Remember to factor in the increased fuel costs and recent utility bill increases.

Consider one off purchases or big one off expenses in retirement.

Many people underestimate the cost of big one off expenses, such as home refurbishments, a new car, dream holidays or family events such as weddings. By planning for these costs in advance you can ensure that you have the money set aside for when you need it, while still being able to draw a monthly income to sustain your day to day living expenses.

Check how much you have already in your pension pot(s).

Most people have several pension pots by the time they retire – workplace pensions, personal pensions and a state pension.

There are also several other types of pensions, so check to see if you have any of these too; 

• SIPP
• Group personal pension
• Maybe you opted out of SERPS in the past and have a pot of money from that?
• S32 Buy Out Bond
• Retirement Annuity Contract 
• Non-profit Deferred Annuity

It’s important to know how much you have in your pension pot(s) so that you can plan and optimise your pensions. Combining your pensions could save you fees. There are a few different ways to find out how much you have in your pensions. You can check your annual pension statement, or contact your pension provider directly. 

Take advice from a good Independent Financial Advisor.

You are unique and so must be your retirement planning. You have to ask yourself if you have the time, expertise and inclination to select the right funds for your pension and savings. 

Most people don’t relish the thought of being responsible for managing their own money. However many also don’t fancy paying fees to advisors. You need to  ask yourself: what is the price of peace of mind?

If somebody else can take care of actively managing your retirement money and do a better job than you could yourself, is it worth a small percentage fee?

A good Independent Financial Advisor can help you to assess your individual needs and develop a retirement plan which optimises your pension pot.  They will help you create a retirement cashflow plan which takes into account market fluctuations and inflation and your lifestyle.

If you’re unsure how to choose the right IFA for you, we’ve got some advice for you here: How to choose which independent financial advisor

The question looming large in the minds of people in their 50s and early 60s is “when can I retire?” The answer to this question depends on a number of factors, including your age, your health, your financial stability, and your desired lifestyle. However, with the help of an Independent Financial Advisor (IFA), you can develop a clear plan for when you can retire.

Think about how you’ll spend your time in retirement.

What do you dream of doing in your retirement? Maybe it’s spending more time with your family or friends, travelling and new adventures. Maybe finally getting around to learning new tricks. Or getting involved in a project you’re passionate about. 

Whichever appeals to you, it’s time to enjoy the fruits of your labour and spend your days doing things that you love. You have earned this!

Finalise your plan and act upon it.

Sound thinking and planning is the foundation for a good retirement. However, to make it work it needs action. A plan is only as good as its delivery. So if you’re in your 50s and thinking about retirement, it’s important to have an action plan and a firm date in mind when you’ll have enough money to retire comfortably on.

The six steps we’ve outlined will help get you started on the right path. But don’t worry if all this seems a bit daunting – our retirement financial planning experts are here for you. We can help you calculate how much money you’ll need to live comfortably in retirement, compare that with the total of your pensions and savings, and project the date you can hand in your letter of resignation.

Ready to get started? Book a call with one of our experts today on 0121 355 4455 or drop us an email to appointments@oaklandswealth.com to arrange a confidential free chat.

Please don’t delay. Time waits for no man, or woman.