Planning a retirement lifestyle is one of the single-most rewarding aspects of working hard all your life. However, this planning is oftentimes wrought with worry, because many people do not understand how to do this successfully so they can live out the best years of their lives in comfort.

From how and where you will reside to how you will care for personal health and end of life decisions, the decisions you make now are critical to successful retirement planning. Here are some helpful tips to help guide you on this journey.

1. Start a retirement fund now. You may have a few years until retirement age, or you may just be starting to think about a retirement plan. Whatever the case may be for you, experts advise planning your retirement with an investment strategy as soon as you can. The sooner you can start to put away money, the more you will have accrued in savings and interest by the time you are ready to retire.

2. Focus on living frugally. The trouble with retirement planning is that some people fall into the trap of trying to get too much stuff early life, which only leads to long term debt. Spending your life paying off debt interest takes away from your ability to dream about the future. Living frugally now pays off later on.

3. Make your “bucket list”. It’s time to start thinking about all the things you’ve always wanted to experience in life. If you’ve put off traveling or taking up a hobby of some sort, now is the time to include this into your retirement planning. This gives you a measurable goal that will keep you on track.

4. Choose affordable living arrangements. Whether you plan to own your home in a few short years, or you want to move in with family; the decisions you make now should include your life needs as a retiree. You may realize that a large house will be too much to manage in your older years, or you may want to have a community of others in your age group as you advance in life.

5. Research services and support for retired people. A portion of your retirement fund will be spent on your personal care and health concerns as an older person. Be sure to plan for these aspects as you put your retirement plan together, considering the advantages of long term care insurance and retirement assisted living communities.

6. Get your will and legal affairs in order. As soon as you are able to, have a personal will drawn up and kept with your lawyer’s office. Let your children or siblings know where to find this information, and assign a power of attorney who can handle things for you if you become ill or incapacitated at any time.

7. Set aside tax free dollars. Being smart with your retirement savings also means investing in the next generation, while enjoying a nice tax shelter. While you can only put a certain amount into your 401k and IRAs each year, you can also put tax free money into 529 plans for your nieces, nephews and grandkids who plan to go to college.

8. Start a second-life career. Most people who retire often want to remain active in other things than leisure living. Consider your talents and experience, and develop a flexible and enjoyable second career path. Perhaps going back to finish your college degree, or starting a home-based business is in order.

9. Work with a retirement investment planner. Getting the most from your retirement often requires the support and guidance of an expert. Periodically review your investment portfolio with a trusted and qualified retirement professional.

10. Pay down debts and reduce overhead. Once you near retirement, consider that you will soon be living on a limited income. Therefore, you want to get your debts paid down as much as possible. Eliminate the burdens of too much property by selling now.

Retirement is a time to celebrate. You can be better prepared and enter this exciting time of your life by planning ahead and reaching your retirement goals in style.

Julia Dennis writes about Eco Friendly Senior living facilities and other assisted living topics for Friendship Village. When she’s not writing she enjoys running and spending time with her children.

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Although it isn’t due to be introduced until 2016, the flat rate state pension is a major shake up of the retirement benefits system and will have an impact on anyone retiring after that time. It’s therefore important to understand what it means and to carry out a pension review accordingly.

If you’ll be retiring before April 2016 then the changes won’t affect you and you’ll be paid a state pension under the current system. Currently this is £107.45 a week for the basic pension or £142.70 if you get the additional pension based on National Insurance contributions or you get pension credit.

Retirement After April 2016

If you reach state pension age after April 2016 then you’ll receive the flat rate pension rather than the existing one. This involves some major changes as follows:

1. You’ll need to have made National Insurance contributions for at least ten years to qualify for a pension (currently it’s only one year) and this will only get you £41 a week.

2. To get the full state pension you’ll need to make 35 years’ worth of NI contributions (currently you only need 30 years).

3. With 35 years’ NI contributions you’ll receive £144 a week at today’s values. Since state pensions are adjusted for inflation this is likely to be more when the policy comes into effect. The new pension will be adjusted in line with the CPI index or 2.5% each year, whichever is higher.

4. The second state pension, pension credit and other top-up schemes will cease. However, if you’ve already built up an entitlement to a higher pension through second pension or SERPS contributions before 2016 this will be protected but you won’t be able to add to it.

5. You’ll be able to take time out to raise a family and still build up state pension qualifying years, which isn’t currently the case.

6. Eligibility for a pension will be on an individual basis, so married couples will each get their own pension rather than the married couple’s rate that’s paid at present. The other side of this is that a widow without enough qualifying years for a full pension will no longer get a portion of her husband’s pension after he dies.

7. If you’re still in a final salary pension scheme with an employer you’ll end up paying more in NI contributions as the contracting out option will no longer be available.

8. The state pension age will be reviewed every five years starting in 2016. It’s currently planned to increase it to 66 in 2020 and 67 in 2028.

Additional Pensions

Because the changes mean the end of the second state pension if you need to increase your income in retirement you’ll need to look at other means. These changes overlap with the government’s plan to have all employees enrolled in a workplace pension scheme which will give them an additional means of saving for retirement.

Low earners and the self-employed, who may in the past have found it hard to build up enough contributions for a full state pension, will benefit most from these changes.

If you’re on a higher income want to save more for your pension then you’ll need to look at other alternatives outside of National insurance such as starting a private pension plan or a SIPP. If you’re in a pension scheme with an employer you could also look at making additional voluntary contributions (AVCs) to boost the value of your pension pot.

Kay Brown is a writer who has a keen interest in personal finance. With the imminent changes to pensions, she suggests conducting a pension review so that you know the impact that the flat rate pension will have on your retirement.

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One of the many things we do as we work each day is consider what our retirement will be like. Do you have yours planned?

I know that I want to build myself a little house near the water in a sunny and warm area, maybe somewhere in Africa or along the Spanish coastline. All my years of hard work will pay off and my retirement will be my time; a time to relax, explore things I haven’t explored yet and visit areas that are still on my “to-do” list.

Enjoy an around the World Cruise

One of the ideas I had once my pension pays out is to take some of the money and book myself on an around the world cruise. Travel in style and luxury, enjoy the on-board food and entertainment and discover countries and sights that I haven’t seen before.

The advantage to waiting until retirement before you take an around the world cruise, is that you have nowhere to be in a hurry. Your days of juggling work and home, getting the children off to school and working full-time are over, it’s your time to shine and enjoy your well-earned break. Do a pension review and ensure that you will have enough money to live comfortably after retirement while enjoying some new experiences such as an around the world cruise.

Try Something New

My idea when I retire is to try something new; maybe take an arts class and learn how to spend my days sitting on the beach front, the sun on my back with a paint brush in my hand.

Another great way to spend time is to explore new countries and try all the foods I’ve been too scared to try before. Have a crocodile steak in Africa or try the spicy delights of Morocco.

Once you retire it’s your time to shine, why not try new things. Write up a list of all the things you want to do when you have the time and spend your time crossing items off the list.

Explore New Countries

I’ve always had an urge to visit Tunisia, I hear there are some fantastic historical ruins there, some of which put the Colosseum in Rome to shame. This isn’t a possibility now, I work full time and manage my children and family, and there isn’t much time to do anything else. But once I retire, have done my pension review and know how much money I have to travel, experience new things and try something different, this will be on my list.

The advantage of travelling when retired is you don’t have a deadline, you don’t have to rush home to get back to work and you can enjoy your holiday at your own leisure. What a pleasure. I hate having to rush home from a holiday, only to start work the very next day and when you have travelled overseas, work is gruelling as you struggle with jet lag. In your retirement there are no deadlines; you simply do everything at your own pace which means holidays will become more enjoyable.

Plan Your Finances

Planning your retirement is exciting and I’ve been dreaming of retirement since I was young as working seven days a week for years on end, I deserve to retire to a wonderful beach house where I can travel on a whim without deadlines. But I need a pension review to ensure I have enough money to live on for many years without working and extra money to travel, try new things and go on my cruise around the world.

It’s really important to start planning early on, save up what you can and add to your pension wherever possible to ensure a comfortable lifestyle in your older years.

Kay Brown is a writer who is passionate about finances, being prepared for the future and travel. With a pension review in place, your retirement can be a pleasant experience where you are in complete control.

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Not all annuities are the same

One of the safe retirement investment options currently on the market are annuities. It might surprise you as these have a reputation as unsafe financial products. Anyway, the truth is that there is very much confusion about annuities.

Such investment vehicles are not all the same. Except variable annuities, there are other similar options which are much safer, like fixed annuities. However, as some condemn all annuities, others tend to present the variable type as the one which can generate the higher gains.

Misleading information and an improper knowledge about these products is what leads people to choose variable annuities for their retirement plans. One the one hand, it is true that this option allows you to get high returns, but this opportunity is to set against some factors that can compromise your retirement income.

What are variable annuities?

Variable annuities are a security and consist in a mutual fund subaccount which includes fees that can reach 7%. These include extra fees that not every investment option has and can be therefore avoided. Variable annuities, in fact, are insured by an insurance company that normally charges management expenses along with other fees.

As the name suggests, the gains generated by this type of financial product can considerably vary as they are highly influenced by the market performance. It means that if you invest an amount of money today, an economical downturn can produce a negative return causing you to lose part or all of your money. That considered, variable annuities are definitely not the best way to ensure a fruitful retirement.

What makes variable annuities risky?

The worst thing about annuities are the many fees you’ll need to pay and that not every financial advisor will tell you about. When planning your retirement you most probably consider important to ensure a safe, steady income. One of the most important things to avoid is unnecessary fees.

In the case of variable annuities, up to 2% of the fees consist in management fees, which are due to the peculiar way this investment option is managed. To these, you have to add up expense fees that, like management costs, you will need to pay to the insurance company that manage your account even in case it crashes.

From this point of view, variable annuities differ considerably from other accounts that only include fees related to your contributions payment or money withdrawals. As experts say, the many fees included in a variable annuity can seriously compromise your gains as you might end up losing money even if your investments do well.

Federica writes for First Senior Financial Group, providing investment education to people at or near retirement with a team of Philadelphia retirement financial advisors. 

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