The importance of proper financial planning for your retirement cannot be overstated. Unfortunately, many people leave it too late to start saving for their retirement and end up having to downgrade their lifestyles considerably once they stop working. In some countries, many pensioners are now living in poverty because they did not invest enough in private pension plans during their working years, wrongly assuming that the state pension would cover all their daily living expenses.
The earlier you start saving for retirement the better, however, even if you less than a decade left before you reach pension age, it is still not too late to start. Even investing a small amount of money every month in a high-interest account of ten years can bring good returns. Ideally, you should consider maxing out your employer pension plan first, especially if your employer matches all contributions. After you have maxed out your employer pension scheme, you can start shopping around for good private pension plans. Keep in mind that you can often get a big tax break on all funds invested in a private pension plan.
In addition to having a pension, you also need to consider having cash savings, real estate assets and a few stocks and shares. With the right plan, you should have your mortgage paid off when you reach retirement age, so you don't have to worry about making monthly payments for your housing. That said, you still need to ensure you will have enough income to cover household utility bills and annual council tax bills. Ensuring you can pay for buildings and contents insurance is also important.
The largest cost to those over 70 is often home care and medical care. So, you might want to look into buying some comprehensive private health care and dental care insurance. While hospital care and doctor's visits are free at the point of use in the UK, you may still have to pay for any prescriptions that you need. What's more, home care costs can be very expensive. Nobody likes to think about not being able to take care of themselves anymore, but the reality is that many older people need in-home care and this can often be as expensive as staying in a residential nursing home. Even if you have a family to support you, there are unfortunately some medical conditions that might be too hard for them to cope with without paid professional help.