How to prepare for the holiday of a lifetime – your retirement

Recent research found that the average Brit starts planning their holiday more than six months in advance.

On average, you will spend more than 30 hours preparing for a break that will last one or two weeks. But how much time do you spend preparing for your ultimate holiday – your retirement?

Your retirement could last for decades, so it’s important to plan well. Keep reading for your complete guide to planning for retirement.

5 basics you should know before you start planning

  1. At the point where you retire, you will probably have the most money you’ll ever have. With no more salary coming in, you’ll have to pay for retirement with the cash you have saved.
  2. You won’t necessarily spend less in retirement. With more free time, your expenses may actually rise.
  3. Inflation will eat into your savings, as things will cost more in the future.
  4. People are living longer. Whatever age you stop working, you need to plan to be retired for a long time.
  5. Investing comes with risk. While a good investment strategy is important if you want to ensure you have enough money in retirement, remember that with higher potential returns comes higher risk.

Planning for your retirement should start by asking yourself some questions.

  1. Do I plan to work in retirement?
  2. How much money will I need?
  3. What savings or other investments do I have?
  4. What pensions will I receive?
  5. What is my health like, and how long am I likely to live?
  6. Do I want to leave an inheritance when I die?

How much money will I need for retirement?

No two people are the same so only you will know exactly how much you will need in your retirement. When you stop working you’ll then rely on:

  • The state pension
  • Any pensions you have arranged
  • Any savings, investments or assets that you own
  • Income from any work.

Once you have established the annual income that you will need in retirement, work out how much of it will be provided by the above. The difference is the amount you’ll need to work towards – and don’t forget to take inflation into account.

I don’t have enough in my retirement fund. What do I do?

Whenever you are planning to retire, the time to start planning is right now.

Your first step should be to pay off any high interest debt that you have, such as credit cards or loans. Then, save up an emergency fund of between 3 and 12 months of your salary in case your circumstances dramatically change.

Then, you’re ready to start planning for your retirement. The basic goal is to save, invest and grow your pension pot so you have enough income for as long as you live.

One place to start is your employer’s pension. Benefits of a workplace pension include:

  • Automatic contributions – the money is deducted from your salary before you receive it
  • Convenience – all the paperwork is done for you and it’s easy to manage
  • Tax benefits – you benefit from tax relief on the contributions you make
  • Matching – many employers will also contribute into your pension fund, and some will even match your contributions.

If you don’t feel you can afford to pay into a pension, start slowly. The tax benefits and employer contributions make it a worthwhile investment, and you can always increase your contributions every few months.

You may be surprised to see that you won’t really miss the money. If you contribute 1% of £50,000 you’ll be paying in less than £10 per week, and that’s just £8 after basic rate tax. Not buying a coffee on your way to work in the morning should save you enough to be able to fund these contributions!

What should I do with the money I am saving?

Nobody can predict the future or financial markets. But, there are some simple rules that you can follow:

  • Don’t buy when the market is rising and sell then the market drops – many people do this and it’s the opposite of what you should be doing.
  • Maintain a long-term view – you’re likely to be saving over many years.
  • Take advice on where you should be investing, or do your research carefully. The guy down the pub, or your father-in-law may be trying to be helpful, but it often isn’t. Think twice about investing all your savings in bonds or fixed interest to keep your money safe – while they may be low risk you will probably not benefit from enough growth for you to meet your retirement aims or beat inflation.
  • Diversify – make sure you invest in a range of asset classes, countries and sectors.
  • Don’t pick the fund that had the best return last year – past performance is no indication of future performance. Just because a fund did well last year doesn’t mean it will be the best next year (quite often the opposite).

Speak to an expert

It’s best to accept whether you will enjoy this process, have the knowledge and experience to do it justice. Recent *research shows that taking advice pays for itself many times over in the long run.

An adviser will take a holistic view of your financial situation, help you to devise and agree your retirement goals, and help you to meet them through regular advice and monitoring.

If you want tailored advice on your retirement options, get in touch. We offer free consultations in Epsom, Surrey. Click here or call (01372) 404417.

This article is not designed to provide individual advice, please seek professional advice before acting on any information disclosed.

* Vanguard value of advice study

* Royal London research


Reviews and Ratings for Financial adviser Ray Martin, Kingston-upon-Thames

We’re highly rated

We retain a 5-star rating on VouchedFor, an independent service that enables clients to review their professional advisers. VouchedFor verifies the reviews and testimonials we receive, so you can be confident that they are authentic. 2018, 19, 20, 21, 22 and 23 Top Rated Adviser, as listed in The Times

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Our former financial adviser was retiring and recommended Ray to us. He alleviated the constant worry of where to best invest our savings without too much risk. We’re very pleased with the results over the last 10 years. He explains things in layman's language, which we appreciate, and gives us the confidence we have made the right choices. What more can people expect?


We had pension policies and investments that needed sorting out ready for retirement. We didn't know what to expect from a financial adviser. We assumed that he would simply advise us where to get the best deals. How wrong we were. Ray took us right back to basics. He made us carefully consider what we really wanted to achieve. He has allowed us to start to really enjoy our retirement.


I needed financial advice about pensions and investments as I approached retirement. My wife was in the same position. Ray Martin worked out a comprehensive plan for putting my pension provision and savings into proper order. He did the same for my wife. He has continued to provide us with advice ever since. Ray is always straightforward, open and proactive.


I was approaching retirement and wanting to look into limiting taxation and Inheritance Tax, as well as providing for my wife. Ray provided sound advice to switch from my current arrangement to a Drawdown Pension and ISA investments. I have now retired and have started seeing the benefits of his advice. The returns on my portfolio have increased beyond expectation. Ray performed extremely well.


I had sold my house and didn't know how to invest the money. Ray invested very wisely and there has been about a 5% increase every year. He listened to our queries, gave answers that we fully understood and followed any requests. He always had time for us, and never rushed us. We would have been financially at a loss without his help.


Ray has been advising my wife and me for about 20 years. He is everything one could hope for in a financial adviser: wonderfully enthusiastic, extremely well informed, completely trustworthy and scrupulously observant of the regulatory requirements. He is able to explain complex matters very clearly, and so far, his advice has always been first class.


I had money to invest and had no idea how to go about investing it and hopefully making a gain. I have three children and wanted advice about inheritance planning. Ray is very patient, very clear when he explains things, he is very interested in me as a person, totally trustworthy and is an excellent listener. We have never been disappointed! He`s been brilliant.


I had just been widowed. Ray sorted out and simplified what was a very complex set of investments into a much less confusing portfolio. I have been extremely happy with everything Ray has advised over the last 12 years. Whilst moving with the times, he has dealt with all aspects of my investments wisely and given me all the guidance and help I have needed.


As the financial director of a company, I was seeking to get advice on how to plan and invest for retirement. Without a doubt, Ray Martin helped me understand and plan how to fund my retirement. Ray has been with me every step of the way. His advice has been invaluable. I retired and achieved my annual income goal. His continued advice is helping me in the next stage of my life.


I needed some advice regarding my late mother’s estate. I had also retired and required advice on how to manage my private pension. Ray was extremely helpful, and his advice was very clear and easy to understand. I came away from our initial meeting feeling very relieved and less stressed. We have just had our first yearly review and I was surprised how well my investments had done.


In the last 10 years, my circumstances have changed with the passage of time. Ray has guided me on how to protect and make my money grow. He listens carefully to my needs and gives clear, concise advice in a professional manner. He and his team are always accessible and patient with my questions and their approach gives me confidence that my finances are securely looked after.


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