How to enjoy a golden twilight

Plan ahead to get the retirement of your dreams

What’s the secret to a happy retirement? It’s all in the planning. We all hope to have some golden years. Here’s how to make sure you don’t end up scraping by on coppers...

I am in the fortunate position to have met and shared the retirement plans of thousands of couples over my 26 years as a financial planner.

That work has shown me some patterns – the things people have had in common to help them enjoy a successful, vibrant retirement.

You can also benefit from that experience and plan ahead to make your retirement the best years of your life.

Know your number

How much will you need to have saved so that you can enjoy a comfortable retirement? I call this “your number”. It’s unique to you because it depends entirely on your retirement plans.

You can work it out by writing down all the things you expect to spend in your retirement years. That may seem difficult, but if you break it down into a plan, it will become clearer.

Some costs you’ll know, like utilities. Others you’ll need to estimate. And this is where those patterns come in.

Add up all your costs then you can start to plan your monthly budget

Life’s chapters

In my book The Money Plan I refer to the three chapters of our retirement. In your first chapter of around ten years, you’re likely to be more active and want to travel more often and further afield – ticking off your bucket list perhaps – so you’ll spend more.

The second chapter often begins at around 75 and typically sees much less travel, or at least less long-haul, which reduces costs. Then when we approach the third chapter, from around 85 onwards, spending is more about getting around. To keep a car or not? Medical spending is often high. Once you’ve added up all your projected costs, you can begin to plan a monthly budget. There’s a free downloadable spreadsheet at www.warrenshute.com to help you on your way.

Do you have enough?

To cover these costs you will have a mixture of your state pension and any private ones. Request updated statements to see where you are now.

If you have enough now, you might ask yourself why you keep working ? If you’re short, calculate how long it will take to meet the shortfall. Use the rule of 300 – multiply how much you’re short each month by 300 to see how much more you need to save.

So if you need an extra £200 per month you need to aim for £60,000 more in your pension (200 x 300).

And don’t leave it to the last minute to know what you’re due. You can get a state pension forecast by visiting www.gov.uk/check-state-pension.

You can also ‘top up’ any missing full years of National Insurance contributions, which determines the amount you’ll get.

Start planning your retirement now. Not just by knowing your number and saving – but by deciding how will you live the rest of your life.