A Simple Guide to Preparing for Retirement

A Simple Guide to Preparing for Retirement

Retirement is something of a binary subject for those of working age in the UK.

You are either actively invested in preparing for it, or the thought of preparing for retirement has never crossed your mind.

For the latter group, retirement can be a daunting thing to think about – but there are some simple ways to approach retirement planning, that make the process more palatable, and make for a high quality of post-work life.

Consider Your Retirement Goals

To know how to plan for your retirement, you first need to understand exactly what it is you wish to get out of your retirement.

No two retirement plans look exactly the same; where some might be content at home with their hobbies, others would sooner explore the world as long as they are able.

To this end, setting some key goals can give your retirement planning some structure.

A common goal within most retirement plans, though, is financial security – to ensure that you can carry out your plans in comfort.

This might extend to supporting family, where a robust financial situation enables you to help out with your extended family without threatening your own living situation.

Shoring up your finances is a necessary part of retirement planning, if not just for ensuring a certain standard of living, then for fulfilling other key goals in your plan.

If you have a thirst for adventure, one of your goals might be to visit some bucket-list countries on an extended holiday around the world.

Alternatively, you might wish to indulge in a hobby in a way you couldn’t while at work. Rather than trusting that you will do these things, enshrine them as goals in your retirement plan and make them a reality.

Your Financial Situation

Finances are a central piece of the puzzle, then, for your retirement planning. To address them properly, you first need to understand your present situation well.

Start with the size of your pension to date, and move on to assets and debts; for example, do you have a mortgage, or have you already paid it off?

Combining these bits of information will give you an idea of your retirement ‘income’ against known costs, such as remaining mortgage costs or house utilities.

This information can come in useful when predicting your future income and expenses. Common income sources can include:

  • Income from pension plan.
  • Annuities purchashed from insurance companies.
  • Potential dividends or interest from investments.
  • Benefit payments that you may be entitled to.

It’s also important to be aware of the most common expenses that you may still have:

  • Basic cost of living expenses, e.g. food, energy and utilities, etc.
  • Potential health care costs.
  • Insurance Premiums.
  • Home maintenance including outstandingn mortgage payments.
  • Potential debt repayments.

The next step, then, is to shore up your finances however you can.

If you have considerable savings, consider placing them in a tax-free account in order to maximise your interest-earning potential.

You might also consider investing some money in a global index fund, with a view to benefit from strong returns. Diversifying investments in this way makes for a safer growth strategy, and can help you avoid financial pitfalls.

Healthcare Planning

While a sticky subject, healthcare is an important ancillary consideration for retirement, particularly from a financial perspective.

Later life is not always an easy road, and there can be some significant medical challenges along the way. Having the money put aside for at-home care or accessibility measures can be a relief for some.

Alternatively, investing in private health insurance could be wise, if only to remove certain anxieties for you and your family.

On-top of researching insurance premiums, you can prepare in good time by estimating other potential medical costs such as some medications, dental or optic care or specialised treatments.

Consider building an emergency fund to cover any unexpected bills or even increase contributions to retirement or health savings accounts (HAS’s) for tax-advantaged heathcare savings.

You can’t put a price on your heath and wellbeing, but having the financial backup for if and when a time arises, you’ll be covered.

Be aware of any benefits that you may be entitled to

Along with your basic income provided by your State Pension there are many other benefits available for UK citizens dependent on your age and circumstances.

Some of the common one worth investigating include but are not limited to…

  • Pension Credit – A benefit aiding retirees with low income, ensuring a minimum level of financial support for living expenses.
  • Free and discounted public transport passes – Investigate options for free bus passes, senior railcards and schemes provided by your local council.
  • Winter fuel payments – Depending on the year you were born, you may be entitled to receive between £250 and £600 contribution for heating bills.

While there are a great many ways in which you can reliably refine or improve your retirement preparations, there is no ‘correct answer’ for how to prepare for later life.

Ultimately, as long as the decisions you make reflect the life you wish to lead after work – and those decisions do not threaten your livelihood or living situation – your retirement will work for you as well as it ever could.


  • Stephen

    Stephen is now retired. He spent 25 years in community welfare and is one of the co-founders of life over 50. He has a keen interest in everything concerning this special age group.....and makes valuable contributions to the site. In his spare time, he enjoys photography, cycling and gardening. Also a keen jazz music lover!

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