Retirement is a time in our lives where we should be feeling relaxed about spending our twilight years not having to worry about things like money, work and generally keeping stress to a minimum in our lives.

The trouble is; a lot of people reach retirement age only to find out that they don’t have as much money as they thought they did, so then they do have to worry about money – and stress levels start to rise again!

In order to minimise the risk of having very little money to live off during retirement, here are some top tips to help you stay one step ahead.

Make sure you have a decent pension plan

No-one is ever too young to start thing about pension plans, and in an ideal world you should be paying money into a pension each month from the moment you start working so that you have enough money in your pension to retire.

Not everyone does this, of course, and many people don’t start paying into a pension until they are in their late 30s or so. But that aside, you should ensure that the pension plan you are paying money into is actually working well for you.

You see, money paid into pensions gets invested into various industries or types of company, and you should get the choice of what kind of risk you want to plough your money into. If you choose high-risk investments, then there is obviously a high chance you won’t have access to your money when you retire.

Make sure that you are well informed about the types of investments your pension plan is set up for, and don’t be afraid to query it; it is your pension, and it is you paying money into it, after all!

Keep debt to a minimum

Everyone has debt to some degree, but the more debt you have towards your retirement age, the less money you will have to live off. If you’ve got a mortgage, for example, make sure that it will be paid off by the time you retire.

If it won’t be, consider making extra payments towards your mortgage each month to get it paid off quicker (but check in case you get charged a fee for early settlement).

Keep your spending to a minimum

Most people don’t consider that they lead an extravagant lifestyle, but you would be surprised how much money people waste each month. For example, eating meals in restaurants or ordering take away food on a regular basis, paying for expensive mobile phone contracts, having the most expensive satellite TV contract, these are all things that can be cut down in order to have extra money spare, that could be saved for retirement purposes!

Consider buying an annuity when you approach retirement age

Many people that are 55 or older use their pension savings to buy a lifetime annuity which will give them a fixed monthly income until they die.

There are many different types of annuity that you can buy, so by looking at the pros and cons of annuities you will be able to make an informed decision as to what’s right for you. For example, basic annuities are perfect if you live alone, but if you have dependents then you should consider a joint annuity.

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