Real-life tips on how to fund your dream retirement lifestyle
5 min | 10 July 2023
While there's no perfect formula to plan for retirement, you can definitely learn from other people's good ideas. Here, people offer personal accounts on how they funded their retirement and what wisdom they’d share with their younger self if they could.
Do you have a view on what'll happen when you don't have to work anymore? Do you know how you're planning to pay for those dreams, or are you winging it? When is the right time to retire? How should you manage your finances when you're no longer working? Retirement might be many years away yet, but these are tricky questions, and there are often no right answers. So we spoke to a range of people to find out what their greatest tip is.
I wish I had better knowledge of how important retirement is. When you’re younger it looks too far away and we don’t think of it as a priority. But when you’re a student – or when you get your first job – we should be thinking about this. My advice to my younger self would be to take it seriously and learn about pensions and the various options. We all need that clarity to understand the benefit of saving for retirement so we can secure a better future for ourselves.
We saved hard for years to clear our mortgage and when we got close we realised we hadn't got a plan beyond paying it off. We got an adviser to look at our total wealth including our pensions and investments. He built a plan for retirement and beyond that targeted a certain income that we were comfortable with. It was the best thing we ever did. Yes, it cost money, but it was peanuts in comparison to the opportunity that could have been lost from us thinking about the future – and doing nothing about it.
Make sure you know your company pension inside out. I was fortunate to have a final salary pension, and most people would assume it’s a decent scheme and to not worry about the detail. But if I had retired earlier, with less service, I could have got a bigger pension. That’s because I took a pay cut towards the end of my career. Work could be very stressful so I chose to move jobs within my company. As I finished on a lower salary, this is what my pension was based on. My scheme also pays my spouse half my pension if I die; this is useful to know and helps you to plan. For example, you may not need life insurance.
Think carefully as to whether you want to retire from full-time work. If your job is enjoyable, why not opt for part-time? Or side-step into another job that is less demanding. That way you still have a little income coming in. It can be good for morale, and you will probably be in contact with people from a wide range of ages, which can be good too. Retirees can also face pressure to take up voluntary work because they are perceived as having lots of spare time on their hands (not true!). You can be made to feel very guilty if you don't take on the job of treasurer for the Bowls Club – even though you don't play bowls yourself – or make cakes for the mother and toddler group with no mention of being reimbursed for your expenditure. Think carefully before signing up for voluntary work. It might be best to take a year out, have a good look around and see what you like the look of.
Some people look forward to retiring. But I’d find it impossible to stop work. I’m a farmer, so you don’t retire, you just ‘slow up’. I handed over the actual farming to a contractor 15 years ago, but I’m still very busy and involved in the business. I get upset if I haven’t got something to do each day. Because I’ve slowed up, I do have time for other pleasures like making things for my wife – I just built her a Japanese tea-house – and taking holidays when we can. My advice to others is to think about how you’ll fill your time when you retire, and try and retire gradually.
My advice is not to expect an inheritance. Make your own fortune in life, and regard anything you do inherit as a bonus.
I’d tell my younger self not to believe in anyone's promises: not the pensions industry about pots of gold at the end of a rainbow, and particularly not the government. Politicians might change the rules 100 times before you retire. Trust your own judgment. Retirement savings don’t just magically appear.
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