How to prepare for your retirement

Sue Agar from the Pre-Retirement Association of Greater Manchester has some advice on how to prepare for your retirement and says planning should start as early as school.

Jar of coins with a label saying "Retirement"


Employees should have regular financial MOTs throughout their working lives, according to a pre-retirement expert.

Sue Agar works at the Pre-Retirement Association of Greater Manchester. She says she would like to see people starting to think about retirement before they even start working, for instance, she says schools should teach children about pensions. At work she thinks people should be helped to plan their finances and taught about workplace pensions when they start and that there should be financial MOTs at 30 and 50 as well as before people retire. That would allow them to see where there is a shortfall in pensions payments and enable them to start saving.

Retirement planning

The Pre-Retirement Association started in the 1970s in response to a growing pre-retirement education movement. There were at one point around 18 regional association and a central one. Following the demise of employers offering workplace training and pensions preparation many of them have since closed, including the central branch.

The Manchester association is the only one in the North West and operates as a small independent charity linked to Age UK. Its main role is education around financial planning. “We see retirement as a process rather than something that just happens,” says Agar. “People don’t tend to stop and think about what they are going to do when they retire. Yet the transition to retirement can be like a bereavement, following much the same pattern. They need to set aside time to think.”

Financial planning

The association offers a two-day course to prepare people for retirement. One of the big benefits, aside from having specific time to think, is to meet peers who are facing the same challenges. “The majority of people have fears and doubts about retirement which they think are unique to them. Talking to others who are going through the same thing can focus the mind,” says Agar.

Those who have taken part says the course gives them structure and makes them think more positively about retirement.

Agar says money is one of the main worries alongside identity issues, particularly for those who have been in high status positions.The association gets independent financial advisers to give advice, but suggests they see three or four in order to find someone who really understands their particular position.

The first thing the association suggests doing is to sit down and plan a budget. Agar says people tend to think their financial position will be worse than it is. They need to factor in, for instance, a lack of mortgage payments as well as costs associated with working such as work clothes, food and travel which they will no longer have to fund. “They need to look at what they are actually using and any discounts they can claim,” says Agar.

Family dynamics

Another issue to consider is the way family dynamics change in retirement, for instance, if there are expectations about childcare for grandchildren or other carer responsibilities as well as relationship changes when couples are with each other 24/7. Divorce rates rise in retirement and Agar advises that it is important to keep separate interests and friends so you have different things to talk about.

The transition can cause other emotional upheaval, she adds. Some people can feel angry or depressed. The more you can plan ahead about how to use your time the better you will be equipped to cope, she says, for instance, if you want to take up a hobby, it’s a good idea to invest in any equipment you need while you are still earning.

You might also like to consider volunteering. Agar says volunteering offers a wide array of possibilities, from becoming a trustee to mentoring. “It offers a way for people to make a difference whatever their status or skills were before,” she states. It also helps to create a structure and gets you out of the house and socialising, so staving off loneliness and isolation. Organisations like the University of the Third Age can also offer courses and opportunities to learn and socialise.

Other issues to think about include legal issues such as power of attorney and wills, what to do with any inheritance money, paying for your funeral in advance to keep costs down, downsizing to save money and how health issues might impact your mobility. “You might want to use that money you were saving for a rainy day before you become less mobile,” says Agar. “The years leading up to retirement is an important time to take stock as you move into something new. The important thing is not to wander into retirement, to think about the practicalities and to know what your priorities are. Often people are too frightened to talk about these things.”

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