![]() Stage Two: Early Retirement (Aged 65 – 72)ĭuring the initial stages of retirement, you’ll see some of the most significant changes to your budget and expenditure. It could be that – in your 50s and 60s you’ll still be helping your kids through university contributing towards your children’s weddings – or even constructing a granny annexe or putting down a deposit on a new home. It’s also worth noting that, during the pre-retirement phase – you’ll likely still have some major expenses in the near-future that wouldn’t be an issue in later planning stages. ![]() If you’ve been planning to travel, or take-up other paid-for activities in retirement – it’s best to start factoring these into your expenses now so you’re not caught short. You’ll need money for the essentials – food, clothes, bills and so on but you’ll also want funds to enjoy your retirement the way you’ve always wanted to. For the purposes of budget planning however, we’ve set the pre-retirement stage at age 55 to 65 as the UK state pension age is currently 66 for both men and women.ĭuring this stage, it’s a good idea to start tracking your expenses – so you’ll know if your savings and pension income will cover you after you leave the workforce. Some people may be in a comfortable enough position to retire at 60 while others may keep working well into their 70s – or even not retire at all. There’s no definitive answer as to when you should retire. With that said, pre-retirement – the decade or so leading up to you leaving work is when you’ll most likely start to get a clearer picture on exactly what your retirement nest-egg will be. We’ve said before that planning for retirement is a lifelong task so it’s never too early to start getting on top of it. Stage One: Budget Planning in Pre-Retirement (Aged 55 to 65) That’s why we’ve created this handy, 4-stage planner highlighting the main financial concerns you need to be aware of during each stage of the retirement process. There’s a lot to think about when budgeting for retirement – so it’s easy to get overwhelmed. Most workplace pensions are accessible from the age of 55 though there are differences across schemes – so it’s worth researching what you can expect to be claiming when the time comes. In the UK, there are two types of pensions you can claim – workplace and state. Of course, how comfortable you are in retirement will depend on your stream of income and, for low-earners, retirement will look very different to those with more room-to-breathe. Please bear in mind that we haven’t made any adjustments to the calculations for inflation and future changes to taxation and legislation.Preparing your retirement budget is one mammoth of a task especially as you could need it to last you several decades. It will also show you how likely you are to live to different ages, depending on how you rated your health, so that you have a good understanding of how long you need to plan for.Then it will work out whether you will have money left over, or a shortfall in the money that you need to enjoy your retirement and display this visually for you.The budget planner will then split all of your costs into essential and non-essential items.You can also set costs to stop at a future date (such as when you have finished paying off your mortgage) or you can add future costs. For each item that you add, you’ll need to decide whether it is an essential cost or not. This may include: your State Pension any other pensions investment income buy-to-let income and any income that you will earn from employment. Then add each source of income separately. Start by entering your age and current state of health.
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