The last few years before you stop working are crucial for setting yourself up for a fantastic retirement. They need careful planning to achieve your goals. Of course, with more people now working past the age of 65 it is not always possible to plan towards a specific retirement date. Here are the most important things to do.
- Plan towards a date after which you will work by choice and if you are able. There is nothing worse than being forced to work late in life by financial necessity. Health problems or lack of employment opportunities may be barriers to work.
- Adjust your living expenses downwards over the last few years to gradually bring them down to within what you expect your retirement income to be. If you work past your planned date, you can treat the extra income as a bonus to either spend or save.
- Review your investments to ensure you have liquidity – that is, the ability to get your hands on money when you need it – and to ensure you have put some money aside into growth investments that will keep ahead of inflation and tax over the long term.
- Review your life insurance cover. By the time you are retired, health insurance and funeral cover are probably the only personal insurance you need.
- Review your Will and think about preparing Enduring Powers of Attorney so someone else can take care of your affairs later on if required.
- Get your house in order, literally. Deal with any deferred maintenance on your home and set up a long term schedule of maintenance for the future so you can take this into account in your plans. If you plan to redecorate your house at retirement, remember that it will be need to be done again ten years later!