If you’re hoping to retire in the next five to 10 years, it’s not enough just to pay into a decent pension, although that is obviously important.
Retiring successfully also requires meticulous planning, similar to the research and training you undoubtedly did before you started your chosen career.
Retiring well involves almost as much preparation.
Before you retire, it’s vital to ensure that you will have enough money to fund the kind of lifestyle you plan to lead.
What’s more, it’s important to consider the structure of your day, what you intend to spend your time doing, and where you’ll be living.
Temporary ‘sugar rush’
Research by Elizabeth Mokyr Horner of the University of California in Berkeley found many retirees experience a ‘sugar rush’ of happiness when they first leave work, only to crash a few years later.
Similarly, a study by Skipton Building Society found a lack of structure in retirement contributed to reduced wellbeing, with retirees missing socialising with work colleagues, and feeling they are wasting their knowledge and talents.
Meanwhile, research by the Universities of East Anglia, Essex, Reading and Sheffield for the What Works Centre for Wellbeing discovered those who retired from the most high-powered or enjoyable jobs found it most difficult to adjust.
So, it’s important to plan for the future.
If your workplace or union runs retirement preparation seminars, be sure to attend as you could find them useful.
Decide how much money you will need
It’s a good idea to talk to your financial adviser and use an online pension calculator to work out a budget for your likely outgoings and how much income you will need to fund your retirement lifestyle.
In the years leading up to retirement, put away as much money as you can into your pension.
Hopefully, your mortgage will be paid off, but you will still have commitments such as groceries, energy bills and transport.
You should also set money aside for socialising and holidays.
If you have any outstanding debts, such as credit card bills, aim to clear these before you retire.
Ahead of retirement, make sure your investments are switched to those with a lower risk profile, such as bonds or government bonds, to maintain the security of your nest egg.
Don’t forget to trace any lost or dormant work pensions you may have forgotten about.
You can read our guide on how much you really need for a comfortable retirement.
Could you retire flexibly?
One decision to make is whether you want to retire completely from work straight away or if you would prefer to reduce your hours at first.
Many people enjoy employment and miss the routine and camaraderie of the workplace.
Before you seek a new part-time position, it may make more sense to find out from your existing employer if reduced hours are available.
However, you will need to balance this with whether you plan to draw your pension at the same time, and if continuing in work could affect how much tax you pay.
Do you need to move home?
A vital consideration is whether you need to sell your home.
You might want to downsize and release cash from your property to fund your retirement or buy a property that is cheaper to heat and easier to manage when you become older.
Potentially attractive options could include a bungalow or a newer home that needs less upkeep.
If you’ve dreamed of retiring by the sea or in the country, think about whether you’ll be close enough to amenities, such as shops, activities and healthcare services that you may require as you get older.
It’s also ideal to consider living in close proximity to family and friends to avoid unintentionally isolating yourself.
While it may be fun to start your new life far afield, it could compound the shock of leaving work if you also find you need to start making new friends and contacts in unfamiliar surroundings.
What’s more, if it doesn’t work out you could find it financially difficult to move back, so it’s worth weighing up the pros and cons.
Think about whether you could still get to shops or hospital appointments without a car if you are unable to drive, or if you would still want to live there if your spouse were to pass away.
How will you spend your time?
Something many retirees don’t think about carefully enough is what they will actually do in retirement.
If you are used to going out to work every day, you could easily get bored and frustrated at home if you don’t have any activities planned.
What’s more, if you’re not used to spending a lot of time with your spouse, you could get on each other’s nerves if you don’t spend time apart pursuing your own interests.
Consider what you would like to do and research what activities there are available in your area for you and possibly your partner.
Depending on how long your retirement lasts – it could be as long as 30 years if you are healthy – plan to take big holidays and undertake physically demanding activities in the first 10 years as you may find these more difficult as you become older.
Think about how you will fund holidays and other activities and take time to build a social circle so that you don’t feel isolated.
If you’re looking for ideas of what to do in retirement, you can read our top tips here.
Don’t make financial decisions in haste
Don’t allow anyone to rush you into making major decisions with your money.
It’s wise to be wary of cold callers or anyone who claims you could make unrealistically high returns on your pension if you were to move it.
Sadly, everyday scammers con unwary savers out of their nest eggs. If you receive a pension lump sum, you could feel pressured to make a snap decision on how to invest it.
It’s your money and no one else’s, so take your time and don’t act in haste.