Advance planning can ease the transition into retirement.
In terms of major life milestones, retiring is up there with starting your first job, getting married and having children.
It can take some getting used to: you have spent the majority of your life working, and suddenly you find yourself without a job, getting accustomed to all-new financial arrangements.
Here are some things you can do to help adjust to your new situation, in both financial and personal terms.
The likelihood is that your income will fall in retirement, but you are also likely to have fewer financial commitments if mortgages and other loans have been paid off.
Drawing up a budget – and doing so as early as possible – is a key part of getting to grips with your new financial arrangements. Compare your likely pension income and spending; if the latter exceeds the former, you need to find ways to boost your income or cut your expenditure, or ideally both.
You can reduce your outgoings by shopping smarter, minimising unnecessary energy use and making the most of provisions like free bus passes for over-60s.
As far as your income is concerned, remember that you have to claim your state pension – it won't be paid automatically. Also, look into the possibility of pension credit and other benefits like winter fuel payments.
Personal and workplace pension savings from early in your career can be tracked down through the Pension Tracing Service.
Investments are another possible source of income, as is your home. Homeowners who take in a lodger can earn up to £4,250 in rent payments without tax, while equity release could be an option for unlocking some of the value in your property.
Most people will be prepared for their finances changing in retirement, but what might come as more of a surprise is the dramatic change in lifestyle.
Not having to work seems like an appealing prospect, but for many people it can lead to boredom, loneliness and in turn a lack of self-esteem.
There are many things you can do to make sure you continue to have a rich and fulfilling life in retirement. You could continue working part-time, health permitting, and keep yourself busy while augmenting your income.
Teaching is another appealing prospect for retirees. If you have a successful career and plenty of real-world experience behind you, colleges or adult education providers might be interested in taking you on even if you don't have any previous teaching experience.
If there is a particular cause or charity you are interested in, you could put your new found free time to good use by volunteering or getting involved in campaigning.
The free time you have as a retiree also means you can take up a hobby, learn a new skill or see new places.
One of the most important things is to keep active and remember that your retirement can be just as fulfilling and rewarding as other chapters in your life.
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