In our book Your Money Day we examine the subject of securing your retirements and set out a series of actions in the form of five steps to working out what you need to do.
Step one is to ask yourself the question “At what age do I want to retire?”
The answer does not have to be age 60 or age 65 but it does need to be realistic.
Retiring today or tomorrow may simply be unrealistic so this requires some thought.
Step two is to ask yourself another question “How much net income will I need in retirement?”
This probably requires a good understanding of your current expenditure (perhaps by completing an expenditure questionnaire) and some thought about which bills might not apply when you retire and which might actually increase in retirement.
Step three is to consider what you already have, “How much retirement income have I already secured from State pension benefits, occupational pension schemes and private pension into which I have invested”?
Step four is to ask yourself what other financial resources you might bring to bear to supplement your retirement income.
“Do I have other savings and investments”? Or perhaps you plan to downsize your property at retirement.
Step five is pretty straight forward; calculate the gap between what you need/want and what you realistically can get from your existing resources.
As Your Money Day explains you now have a target to aim for.
If you can close the gap or even eradicate it between now and your chosen retirement age then chances are you will have the retirement lifestyle you want rather than the one you are forced to live with.
