How To Plan For Retirement With A Retirement Strategy

How To Plan For Retirement With A Retirement Strategy

With the average life expectancy in the UK increasing and the cost of living growing every year, it’s more important than ever to appropriately plan for your retirement. The best way to do this is by creating a retirement strategy; this will allow you to enjoy a comfortable retirement without any financial stress.

But how do you plan for retirement? The team here at Orchards Accountants is here to explain the process.

Why is a retirement strategy important?

A retirement strategy is a comprehensive financial plan that will ensure you have enough income and assets to maintain your standard of living. This proactive measure involves assessing your needs both now and in the future, setting realistic financial goals and creating a plan for how you’ll achieve them.

Without a proper retirement plan, you may face financial instability in the future and there is a risk that you might outlive your retirement savings.

Steps to creating a retirement plan

• Set retirement goals: Sit down and have a think about your ideal retirement. At what age do you want to retire? How much travelling are you planning to do? Would you like to move or downsize beforehand? All of these factors will influence your retirement plan. 
• Assess your finances: Review your current financial situation, taking into account savings, income, investments and expenses. This will help identify any issues and determine whether you can afford to retire when you want while maintaining your current lifestyle. 
• Estimate your expenses: Track your average monthly expenses and make a list of any additional costs that you expect to incur during retirement. This will help to create a more accurate, realistic plan by ensuring your savings goals will meet your needs. 
• Plan for the unexpected: Life can be unpredictable and none of us know what’s around the corner. When planning your retirement, it’s best to factor in unexpected expenses, such as inflation, major home or car repairs, emergencies or any long-term care that you might require. 
• Maximise your tax-efficient savings: A great way to boost your retirement savings pot is by making the most of your tax-efficient savings options. Pension contributions come out of your pre-tax income, meaning they reduce your taxable income. If you’re under the age of 40, a Lifetime ISA (LISA) is also worth investing in, as you can withdraw it tax-free after the age of 60 and you’ll get a 25% government bonus every year up to £1000. 
• Diversify your income sources: Relying on a single source of income during retirement can be risky. If you’re able to, it’s recommended to protect your savings by spreading them across multiple investments, such as bonds, property, stocks, shares and more. This minimises risk and safeguards them against any potential losses caused by unexpected economic downturns. 
• Regularly review your plan: Your financial situation can change over time, which means retirement planning isn’t a one-time job; it’s something that requires periodic check-ins. By regularly reviewing your retirement plan, you can ensure you’re on track, work around any unexpected expenses and react to any market fluctuations or policy changes. 
• Work with a trusted accountant: An experienced accountant, like Orchard Accountants, can help guide you through all the complexities of retirement planning and create effective retirement strategies that work for you.

How can Orchard Accountants help?

Here at Orchard Accountants, we offer a personalised retirement planning service to customers across Gillingham, Rochester and the surrounding Kent area. Our friendly team will take the time to understand your needs and advise you on how viable various strategies are and just what they will mean for you. Whether you know nothing about retirement planning or you’re well into the process, we provide expert retirement planning advice to help you on your way. 

Contact us today to learn more.