Are You Prepared for Retirement? Ask Yourself These Questions to Find Out
The term retirement dates to the days of the Roman Empire, who provided pensions to Roman soldiers. In those days, people who survived beyond their 40th birthday were the exception – life expectancy in the UK is now 79.4 years for males and 83.1 years for females;
The average retiree can therefore expect to live for 15 – 20 years. Are you ready to make the most of this time of your life?
Approaching retirement age
As we reach the end of our fifth decade, our thoughts inevitably turn to the next stage of our lives – retirement. And as those early sixties years role by, an increasing number of our friends and social circle move from the 9 to 5 stresses to a life of (seemingly) unending leisure. Our thoughts then are increasingly drawn to our third age.
The above assumes that the option of earlier retirement is not financially viable. The golden age of lucrative final salary packages having largely passed by, you will have to wait for your State Pension Age to draw on your State Pension. It also assumes that the choice is not made for you, via redundancy, business failures and ongoing unemployment.
How to prepare
However you arrive at seriously considering retirement, some preparation is required in order to make those final years enjoyable. One way to approach this is to consider the major lifestyle categories, and rate your preparedness on a scale of 1 to 10 (10 being fully prepared, 1 being haven’t even thought about it). As a couple, you might want to do this exercise separately and compare results.
Do you seek an active lifestyle in retirement (hiking, golf, gym sessions)? If so, have you researched what opportunities are there locally that would allow you to participate in physical activities? If you foresee a more sedate lifestyle, how do you intend to maintain your body to be as fit as you can be?
Are you mentally active and keeping your memory agile? How do you view learning new skills – as an exciting opportunity or too much trouble? The internet is likely to play an increasing part in our lives (online shopping, learning, social media) – how will you cope with these challenges without work colleagues to guide you?
Have you talked to your partner about the changes that retirement will bring? Being home seven days a week? What are your expectations of each other – how much time will you spend together? How will you share the chores? So much to discuss, best not to leave it until you are both together 24/7.
Do you know how much you will have to live on? Have you calculated income and expenditure? Do you expect to travel, improve the house, change the car(s)? Best advice – get your pension forecast, talk to an accredited expert and avoid the pension scams.
Do you plan to stay in the same house? Downsize? Move to a different area of the country? As your family grows and departs (assuming they do) your housing needs may change. If you do decide to move, select a house for your future mobility needs, or plan to adapt your existing house to cope with those changes.
One of the benefits of work is (often) a built in social circle – Christmas parties, leaving drinks, ad hoc nights out. When the work link is severed, you will need to build on an existing social network or make a new one. Exploring these possibilities (clubs, organisations, volunteering opportunities) in the weeks and months prior to retirement will ease the shock when you’re in it.
What lifestyle do you aspire to? If you hanker for expensive foreign holidays you will need to factor that in to your finance plan. Or you may be planning to take up or expand on a hobby or sport – talking or at least thinking about your post retirement day lifestyle will prepare you for it. How about pets – there are plusses and minuses to cats and dogs in later life.
Where Should You Focus Your Attention?
Hopefully you can now identify where your attention needs to be – finance is a large consideration and affects all of the other sections. But it’s not the only factor and asking yourself and your partner these questions will give you a starting point towards a satisfying retirement.