Many people long for the day when they can escape the daily grind and retire, but simply stopping work isn’t enough. We want to enjoy a certain lifestyle and spend time doing the things we love.
What steps can you take to, firstly, retire early, and secondly, be in a financial position to afford the life you want to live?
Save money
Depositing money into savings accounts and pension schemes puts your future finances on a solid footing, so make it a priority to save some of your income every month, as early as you can.Increase pension contributions when you can
If you’re in a position to increase your pension contributions by even the smallest amount, this could add up to a considerable figure by the time you choose to retire. To do this, speak to your employer or payroll, who will set up an additional voluntary contribution for you.Pay off and avoid debt
The interest you pay on debt is far higher than interest on your savings, so it’s well worth paying off debts as soon as possible. Make sure you’re at least covering the minimum payments, or the debt will soon mount up.Be prepared for emergencies
Accidents and changes in circumstances can happen without warning, so you need to be prepared. Make sure your home and possessions are properly insured and consider taking out life insurance, income protection and critical illness cover.At the same time, try to have about 3 to 6 months’ income set aside in an emergency fund, so you have something to fall back on in the event of a disaster, such as losing your job or needing to pay for major home repairs.
By having an emergency fund, you’ll be in a better position to keep on top of your debts and not need to dip into the money you’ve put aside for retirement.
Work out what you expect to spend in retirement
Estimating how much you expect to spend in retirement can help you work towards early retirement and put a figure on the amount of money you’re likely to need. This could start with the basics, from utility bills to groceries, to those extras that mean you can enjoy the lifestyle you want, such as luxuries and discretionary purchases, including holidays.Remember that many of your existing outgoings may not be an issue in the future. For instance, if you have children they may have grown up and left home by the time you retire.
Buid your personalised retirement plan in the Creative Pension Trust Member Portal today! See what all your pension pots might give you in retirement, if you’re on track for the retirement lifestyle you want, and make an action plan to get you where you need to be – click here to get started.
Look at how much income your assets could generate
If you have multiple sources of income, such as state, workplace and private pensions, savings, investments and property, estimate how much income they could generate. This will help you see where changes need to be made. For example, should you increase your pension contributions? Or maybe diversify your investment portfolio?Build your personalised retirement plan in the Creative Pension Trust Member Portal. You can include things like pension pots, investments, rental income and other sources of income. See if you’re on track for the retirement lifestyle you want, and make an action plan to get you where you need to be – click here to get started.
Get on top of past pensions
If you’ve moved from job to job throughout your professional life, you may have money with a range of different workplace pensions, which can be easy to lose track of.You can take control of your old pension pots once and for all by using our new service to help you easily track, trace and manage your old pension pots. This way you can see everything in once place, get live updates on their performance, and even transfer them at the click of a button. Get started by digging our your old pension paperwork and head to the Creative Pension Trust Member Portal.