When Can I Retire?

 “How much do I need for my retirement” is arguably one of the most serious questions facing a working-age adult.  The answer ultimately depends on two questions.  When do you want to retire and what kind of retirement do you want to have? 

Planning your retirement 

If you want to retire at 55 and spend the rest of your life cruising the world on your private yacht, you are going to need a whole lot more money than if you want to retire at 75, downsize your house and spend the rest of your life writing, painting and gardening. 

Therefore step one in your retirement planning is to think realistically about how you want to spend your later years.  The more specific you can be about your plans, the better you will be able to budget for them.  This might also be a good time to think about the realities of growing older.  

For example you might need home help or short-term care or even longer-term care in your final years.  Do you have a plan to finance this?  Would insurance be helpful?  Once you have at least some sort of realistic ballpark figure it is time to see what you need to do to reach it. 

What do you already have in terms of retirement savings?

Younger people just starting out in the world of work will have had less time to save for retirement.  On the other hand, they have more time in which to prepare for their later years.  Because of this, it may be tempting for younger people to think “I will start saving for my pension later”.  

The risk is that “later” will be pushed further and further back.  If you find that you are getting closer to retirement age but have still not started saving for retirement, then late is still better than never.  You may have to work to make up for the savings time lost in your younger years, but this is still better than arriving at retirement age with no preparation at all. 

If you have already started saving for retirement, congratulations.  Now is a good time to double-check if you are saving enough for your plans.

What happens if you are saving too little for your dream retirement?

You have various options available in this situation.

Option 1 is to rethink your retirement plans.  There may be ways for you to achieve the goals which really matter to you, whilst scaling back on some of the optional extras.

Option 2 is to work for longer and/or phase in retirement.  How feasible this is depends on various factors, in particular your health and your skills.  Even if you are in a physically-demanding occupation, you may still be able to find ways to earn money. 

For example a physical trainer may be qualified in nutrition and able to build a business around that skill.  A gardener or tradesperson may still be able to take on small jobs and/or to teach.

Option 3 is to start saving more now.  If your current lifestyle does not make this possible, then you need to decide what changes, if any, you are able and willing to make to improve your retirement finances. 

In very simple terms this means increasing your disposable income either by increasing your income in general or by reducing your expenses (or both).

What should you do if you are saving enough for retirement?

This may seem a surprising question, but it is a very important one.  If you think that you are saving enough for retirement, you may wish to have someone else double-check your figures for extra reassurance.  If you are still happy, congratulations. 

It is a good idea to continue to carry out regular spot-checks on your retirement plans to ensure that they stay on track.

For more information please do not hesitate to contact the team at Ward Williams Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.