7 steps to a happy retirement – it’s never too soon to create your retirement plan

Happy romantic senior couple hugging and enjoying retirement at home


Some of us find it difficult to even think about retiring, let alone plan for it! But you need to do it and it’s best to start early if you can.

When you have a retirement plan, at least then you don’t have any shocks.  One of my clients hadn’t realised he wouldn’t receive a state pension until he was 67; he thought it was still 65.  Guess who had to burst his bubble!

So, avoid any shocks and look ahead with a retirement plan shaped for you. 

Surprisingly I have noticed that men usually have some kind of retirement plan when asked, but my female clients tend to say they will probably just carry on working.  It’s great to enjoy your work this much, but it’s also good to slow down a bit!  I took on some gunsmith clients several years ago as their accountant was retiring; he was 90 and died 6 months later.  Best to create your retirement plan now and avoid this happening to you!

1. Plan Ahead

The first part of a retirement plan is to think about when you would like to retire and what you would like to do in your retirement.  Mentally it will be easier to not just stop working but have something else you can do, something to look forward to doing.  One of my subcontractors joined a netball group and started swimming again before she retired so she already had something set up.  It may be that you want to help out at a charity, look after your grandchildren more or join an art group. Perhaps you’d like to travel or learn a new skill. There are so many options!

Any retirement plan you make needs to be flexible as we don’t know what’s going to happen next.  Several of my male clients planned to retire from employment and set up a small business so they could do something, but not as much.  They both ended up working harder than ever as they enjoyed it more than employment!

So, keep your retirement plan flexible and review it regularly. Make sure that as things change, your plans change, otherwise there’s no point in having a retirement plan! You may have a change in circumstances which has an impact on your timescales. I think Covid had a significant impact on a lot of people’s retirement plans and many brought them forward. Perhaps people had time to think about what is important to them and what they want to achieve – and work can get in the way!

2. Set Retirement Goals

Once you have some ideas of what you want to do in retirement, the next step is to set goals by answering these questions:

  • When do you want to retire?
  • How much money will you need?
  • What will you do with your time?
  • Is there anything you need to set up now in readiness?

You can find out when you will start receiving your state pension on the government website.

3. Set up a Predicted Budget

There is a budget template on my website that you may find useful for your retirement plan.

Think about the expenditure you are likely to have when you retire.  Remember some of your costs may disappear, such as mortgage or commuting costs; some may decrease, such as travel and work clothes. However, some may increase, such as energy costs if you will spend more time at home. Enter your expenditure under each month so that you can easily see the costs you’ll need to cover.

4. What is Your Epected Income?

Visualise all of your income going into a pot:

  • State pension
  • Private pension – if you haven’t got one set up, then you need to do this. The sooner you start, the more your pension will grow, because of compounding! For example, if you save £50 every month for 10 years, you’ll have £6k, but if you invest it at 8% you’ll have £9,150!
  • Dividend income
  • Rental income
  • Interest income

5. Clear Your Debt

Be honest with yourself regarding your situation. Do you have any debt now? If the answer is yes, then this needs to be your priority. Clear any debt as soon as you possibly can. Your mortgage is fine as that will be factored into your retirement plan already.

6. Start Saving

Start making an automatic transfer into your savings.  Doing it this way you won’t notice the amounts disappearing as you won’t be physically doing it; the decision will have been taken!  Your aim is to build up an emergency fund of at least 3 months’ expenditure.

Where to save will depend on your attitude to risk and also how old you are when you start saving.  Do you need 100% of your money because you can’t afford to lose any of it? If this is you, then I’d recommend saving into a cash ISA.  If you are happy to possibly lose some of your money in the short term, then a stocks and shares ISA will give you a higher return.  Whichever ISA you choose, you can deposit up to £20k each tax year.

7. Set up a HMRC Account

HMRC has various resources to help you with your retirement planning.  I recommend having a look at these.


Take the time now to start planning your retirement.  You’re never too young to start and having a retirement plan now will take the pressure off when you’re older.  Good luck!