What are the best retirement plans UK?
Do you have a retirement plan? Savings, investments, property or something else to support you later in life?
Hmm, not having a retirement plan or having a bad one is not likely to turn out that well later in life.
If you don’t have a retirement plan, then I guess you’re leaving it to chance to see how that works out for you, but luck is not really a good strategy.
The key to a good retirement plan is to have a good life before and after “retirement”.
If you think you might need to up your retirement planning, then read on to hear what you can do yourself to increase your chances of a dignified, comfortable and secure retirement.
Table of Contents
The best retirement plans should be fitted to you.
When you walk into a shop and ask for the best suit or dress, what are you expecting?
- The best priced one?
- The easiest one to wash?
- The most fashionable one right now?
- OR the one that fits you the best?
Generally, it’s the one that fits you the best – with the appropriate caveats around the price, fashion and usability.
What the average person buys or what others consider best in the shop may not be the best one for you for several reasons.
The best retirement plan is the one that’s best for you right now and when you retire.
Imagine a retirement or life plan that meant you never really needed to retire. Does that sound interesting?
Spend some time thinking about what good looks like.
Picture yourself retired – or at least when work becomes optional. What have you already done on your bucket list, and what else is left?
What does good look like? What are you doing, and what are you not doing?
Here are a few areas where you might have goals or things to aim for.
- Health and fitness – able to take part in hobbies and interests that involve exercise.
- Recreation and hobbies – time and space for the fun things in life
- Family and Friends – time, space, energy and funds to meet up with people.
- Romance and Relationships – able to do special things with special people.
- Finance and net worth – independent, comfortable, secure with plenty of options
- Career and business – if you want to continue with professional activities, whether paid or not. Able to continue working with or in your business.
- Personal development-able to have time and space to learn new skills.
- Spiritual goals – able to pursue your purpose in the world, community or family life.
Here you are ideally looking for a balance in all areas.
- Being wealthy but unhealthy is not going to lead to a good life.
- Having an all-consuming business may compromise your family and friend’s time.
- Having no hobbies or recreation time might affect your social life and chances of romance and or relationships.
Looking for a balance in these areas is going help creating your best retirement plan.
And as mentioned above, what do you want to avoid?
- Still needing to work for money.
- Tired and out of shape
- Worried about money.
- A compromised life due to lack of time and funds
- A long list of things you wished you had done but can’t do now.
With these in mind, it will help you understand what direction you need to start heading in.
With a few dates added to these, it will also give you an idea of when you want these to happen.
This can be guesstimated by working out what they cost today and with a calculator what they might cost in 10, 20 or more years. These may be guesses; by at least, you will have an educated estimate.
Now you know where, when and an indication of how much is need for your best retirement life.
From here, we can work forwards or backwards to see what actions need to happen.
Spend some time figuring out what actions you need to take.
Considering the picture of your best retirement, what actions do you need to start to make them happen?
Here’s where you would look at the steps needed to reach your best life now and retirement one day.
It could be that you need to
- Get up early and or to bed earlier
- Eat healthier & exercise more.
- Earn and or save more.
- Spend more time planning.
- Find the times of day that work best for you.
- Improve your financial management and literacy.
- Develop your knowledge mindset, skills or behaviours for all of the above.
- Find additional help with things you are getting stuck with.
Of course, there are highly likely to be roadblocks you are going to face:
- External ones around time, other people, competing priorities between work, home life and leisure.
- Internal challenges around time, energy, motivation, mindset, knowledge and skills.
- Dealing with setbacks, things going wrong, wrong turns and being let down.
Having at least 5+ answers to each of your potential roadblocks and challenges will pre-arm you to deal with, cope, prevent, mitigate or recover from the inevitable questions and roadblocks that will come your way.
The biggest potential roadblock you will face may well be your internal resistance.
Start building your best life and retirement now – get perfect later.
Spend some time understanding your current and future means.
OK, so now we come to the money or means.
What is it going to take money wise to reach your goals?
Here you are going to need to understand your numbers.
- Your net worth – everything you owe vs everything you own.
- What life costs you weekly, monthly and yearly
- Your savings rate – what do you put towards savings every month and or what could you if you tried harder.
- The above figures will help you to figure out your freedom number – when work becomes optional.
Your freedom number is often calculated using the 4% rule of thumb. When you have 25 times your annual spend, you could withdraw 4% every year and not run out of money.
Adjusting as necessary depending on what’s going on in your life or the world.
So, if someone needed £40,000 a year to live the life they wanted:
25 x £40,000 = £1,000,000. £1,000,000 * 4% = £40,000
A few ways that you can start building your retirement savings or work optional fund.
Just think about when you want to access the money before committing to something that locks it away.
- Joining your companies pension scheme – there’s free money available there.
- Set up your own private pension or a SIPP (Self Investment Pension Plan)
- Save and invest into an ISA (Individual Savings Account)
Your best retirement plan will need you to have spare cash to fuel your savings and put towards the things that make a great life now and in retirement.
- Look for ways to earn more money in your current career or pivoting to another.
- Create a side hustle to bring in more money and create a job you never want to retire from.
Depending on how far you are away from your retirement date, making small incremental changes or more rapid if time is shorter.
Are there things you;
- Love doing
- Are good at
- The world needs
- People will pay you for
If you had a job or career with the above, would that feel a lot less like work?
If you could do this, this would be finding your Ikigai, a Japanese term roughly meaning reason for being.
Is that something you could work towards with self-study and/or a side hustle to pivot you to a lifestyle you didn’t need to retire from?
Maybe a lifestyle you didn’t need to retire from would be the best retirement plan!!??
Execute your plan, review, and revise as you go along.
Once you start your path to your best retirement plan, you will need to occasionally check to see if you are still on course or even check you still want to head in that direction.
Life changes as you age, things drop off your list, some things might even drop off you!!
That’s why a review and revise process is good at least once a year to make sure you are making progress and, more importantly, improvement in the right direction.
Zig zagging to the right place is perfectly fine; not everyone can make optimal decisions all the time.
Progress is better than perfection.
FAQ: Best retirement plans UK
Which is the best retirement plan?
- The one that fits you like a great suit or dress.
- One that will make you secure, independent, comfortable with plenty of options now and in retirement.
- Even better, a life plan that you feel you don’t need to retire from.
What is the best way to save for retirement UK?
- Creating passive income sources through businesses is a great way to save and have ongoing income in retirement.
- Retirement accounts at your company or private pension can be good ways to boost your retirement savings with tax incentives.
- ISA’s are also a good way to save with some tax incentives – you just have to be disciplined not to raid them.
How much do you need to retire comfortably UK?
- WHICH feel that for a luxury lifestyle, a single person needs £31,000 and for a couple in the region of £41,000
- Further thoughts on this can be found here
Where should I put retirement money now?
- If you don’t need access to it until 55-57, it could be a retirement account.
- If you think you might want access to it before then, then an ISA may be better.
- Investing in the world’s great companies through low-cost, globally diversified index trackers might be a good place to grow your wealth over the long term.
How much pension do I need to retire comfortably?
Summary: Best retirement plans UK
Set your Goals
- Figure out what your best life now and in retirement would look like
Figure out the Actions that are needed to get there
- Figure out ways to overcome internal and external roadblocks that will occur.
- Look for resources that can help with the questions that come along the way.
What money or Means are you going to need
- What do you have right now?
- Do you need to create more in your current job and or create more in a side hustle?
- Are there better, easier, more profitable, more fun ways to make and manage your money to financial freedom in retirement?
Execute your plan
- What needs to happen, when and how?
- Review your plan periodically to ensure you are on the right track to the right destination.
- Can you make your best retirement plan something that makes your life fulfilling now and in retirement. Living your best life now and later.
Would having a GAME plan or financial coaching help understanding your money and life needs?
- Is your life, job and financial admin in a mess?
- One or two months away from financial disaster if you quit?
- Not enough time or money to achieve what’s most important to you?
- No idea how to plan, save and invest to become financially secure?
What’s likely to be the outcome if you don’t make some serious financial plans and start saving?
Without making some clear plans you are at real risk of having nothing to fall back on when things change for the worse.
Financial life coaching and planning will give you the support, guidance, and accountability you need to succeed with money and life building your savings and wealth.
- Get you financially organised
- Build your savings cushion for when things go wrong
- Help you figure out how much money is enough
- Help you understand and build wealth to never run out of money
Start building your money confidence now because waiting will only make it more expensive and painful to achieve later.
Plan, build and enjoy your money.
Taking you from life and financial crisis to happiness.
Contact us here for a free chat about building your money confidence and what options you might have for creating wealth in every area of your life.