Retirement planning is something that for some people can feel like something they need to think about when they are older. For others they may think that it is just too late. Some may think that they are struggling financially enough and they need to prioritise paying off loans before worrying about retiring. However, it is something that needs thought and you need to think about how you are going to plan things as well.
What age should I start?
We are often told that we should start planning or are retirement as soon as possible. However, when we first start work, when we are still a teenager, it is so hard to imagine what it might be like to be retired. If we get offered a work pension then it can be tempting to opt out and use the money to pay for day to day items. This is because we may have a low wage and lots of things to pay for. As we get older though, things can get even dearer as we take on our own household, perhaps have a family and even later we may have to care for our parents or pay for them to be in a care home. It can feel that there is never time to be able to afford to pay in. However, if you start young and just pay in a small amount, this will add up through all of your years of work. Then when you do retire it will have accumulated to a decent pot. If you wait until you are older, you will have to pay in more if you want the same size of pension pot or you will have a lower pension.
What should I do?
It is probably wise to start thinking about retirement right away. Think about how much money you think you will need in retirement and whether your government pension will be enough to provide you with the retirement that you want. If not, then you will need to think about how you will be able to put by enough money so that you can. There are pension calculators that you can use which will allow you to work out how much you will need to invest. You may, of course, decide to incest in a different way to a pension.
What if I have no pension fund?
If you are still young then there may be plenty of time to set up a pension fund. You might be able to do this through your work or set up a personal one. There are also alternatives to investing in a pension fund for retirement as well, which are worth looking in to. If it is too late and you have stopped working and have no pension fund, then things could be trickier. You might be able to pick up some work again so that you could start paying in. Otherwise it may be that you will have to rely on being looked after by the state or by your family. It is worth looking into your options just in case there is something that you can do.
How Can I Plan?
Planning your retirement can be tricky as you will not know how long you will live or what your state of health will be. However, you should be able to work out how much you will have financially. You can use the governments website to calculate how much pension you will be entitled to form the state and you should know how much pension you will get from other sources such as work pensions and personal pensions. Once you have this information you should be able to work out how much income you will have in retirement. Compare this to what you have now and consider how your expenses might change and you will be able to work out whether you have enough. If you feel that you will not have enough money then you will need to consider how you can get more. Many people would consider a pension and paying more into that but there are other possible investments that some people choose to use instead. It can be wise to do a lot of research and possibly even use a financial advisor to help you so that you make the right decision.
It can be pretty scary thinking about retirement. It can be a worry wondering how you will afford to pay in enough money or that you are getting close to retirement without having paid in much. However, ignoring the problem will not make it go away and the quicker you can take action the better. Even if you just start putting away a very small amount of money it will be better than doing nothing. It is worth trying to be positive and trying to improve your situation rather than worrying about how bad things could be. Even if you are very close to retirement, you could still make a difference if you really wanted to.