Workout your retirement incomeFirst things first, you should start out by working out how much income you are likely to have in your retirement To work out how much you are likely to receive, it will involve the following:
- Getting a state pension statement. If you have yet received a state pension statement, you should go about getting one. This document will outline the estimate of how much you are likely to receive as your state pension. This will be based on your national insurance contributions so far. To get this, you can visit uk.
- Find out how much you are potentially going to receive from the defined benefit pension. Each year you will receive a statement as to how much pension you have built up so far and how much you can expect to receive when you eventually retire.
- Adding up the investments and savings that you could use during your retirement. A pension is a great way to save for the purposes of retirement, however, you may also have to have other savings in place that could be used to increase your income and therefore the quality of retirement.
- Tracing any pension that may be lost. You may have lost track of any old pensions; however, you can use the Pension Tracing Service to help you find them once more. This service is completely free and is run by the government. There are other services which are similar which are not run by the government, but you will be charged for these.
Clear any debts before you retireTo start your retirement off as stress-free and as well as possible you should aim to clear all your debts beforehand. It is no secret that your income is likely to decrease when you retire, so any fixed payments going towards debt will be more noticeable. You should:
- Check the interest rate that you are paying on each debt.
- Add up the total that you owe. This could be on your credit card, on any personal loans and on your mortgage.
- Work out if you have any money to spare and pay off the debt that charges the highest interest rate as a priority. This is a very efficient way to clear any debts.