Fed up of the daily grind? Want to spend more time with your family? Dream of taking a long holiday? Maybe you just want to choose when you work. If you want to know how to retire at 55, here are 20 tips that will help you get there.
How to Retire at 55: 20 Tips to Help You Get There...
CONSIDER THE TAX IMPLICATIONS OF ALL YOUR FINANCIAL DECISIONS
Tax can be pretty overwhelming: even for the most seasoned business people. Yet it doesn’t have to be. Carefully thought out financial advice can make a significant and positive impact on your wealth. A professionally prepared tax plan could help you and your loved ones retain more of your money, now and in the future. If your tax arrangements are complex, think about retaining the services of a professional adviser.
MEASURE THE GROWTH IN YOUR WEALTH REGULARLY
There’s an old adage: “You can’t manage what you don’t measure”. Make sure you’ve got a system in place to track how your wealth is growing over time. You need to know when you start drifting from your retirement plan and be prepared to take some corrective action.
TRACK DOWN AND GET CONTROL OF YOUR LOST PENSIONS
More than £3 billion of pensions funds are reported to be forgotten or lost. Those pensions are likely to be from old jobs and could be performing poorly. Left where they are, your funds could be worth less at retirement than they are today. Find your pensions and make sure they are under control.
MAKE A PLAN
Be clear on the outcome you’re looking to achieve. Research and develop a strategy for how to get there and make a plan for how you’re going to implement that strategy. Otherwise you’ll just be shooting in the dark and whether you actually get to retire at 55 will be more a game of chance.
MAX OUT YOUR COMPANY'S MATCHED PENSION CONTRIBUTIONS
Workplace pensions are great. If your company will match your contributions up to ten percent, pay in the full amount to get the biggest boost to your savings available. However, this level must be affordable and you have to understand that if you are 55 you cannot access your pension.
DON'T RUSH TO PAY OFF YOUR MORTGAGE
There’s a commonly‐held misconception that all debt is bad. That’s not the case. With interest rates at record‐breaking lows, it may well serve your finances better to invest your free money in equities, rather than paying off your mortgage.
USE UP YOUR ISA ALLOWANCE
Individuals can invest up to £20,000 a year into an Individual Savings Account (ISA), based on the 2020/2021 tax year. Money invested into ISAs can grow tax-free and can be withdrawn without incurring income tax in the future.
CREATE A SUCCESSION PLAN FOR YOUR BUSINESS
Very few business owners have a detailed succession plan in place for their business. It’s not just a case of who will look after things whilst you’re on holiday. You need to know what will happen if you’re not there at all. Your business will be one of your most valuable assets and you need to have a plan for how this will generate an income for you once you’ve retired, whether that’s still taking an income as the owner or benefiting from the proceeds of sale.
There you go. 20 tips on how to retire at 55. Do you favour any in particular? Have I missed anything out? Comment below to join the conversation.
* Investing money should be seen as a medium to long term strategy. Your capital is at risk and may go down as well as up. You may get back less than the original amount invested.