For most of us in the world of work, retirement isn’t something we often think about. And yet, there will come a time when old age renders us no longer capable of performing the same job. On the other hand, we might get to a certain point and decide that we’d rather not work any longer. With the right planning, you’ll have the financial freedom to make this decision. But that planning will need to begin at an early stage.

Your first step should be to establish what you’re going to receive from a state pension, based on the National Insurance Contributions (NICs) you’ve made thus far. For some, this income might be more than sufficient to maintain the same standard of living you’ve been enjoying thus far. For others, alternative arrangements will have to be made.

How do I trace Lost Pensions?

Sometimes, we set up pensions with the best of intentions, only to forget about the details soon afterwards. Don’t worry – this money isn’t lost forever. You just need to use the Government’s free pension tracing service to track down the account. Note that there are some similar services out there which do the same thing for a fee – don’t confuse the two unless you want to spend more than you were planning on doing.

Calculate your Safe Withdrawal Rate

If you plan to retire early, then you’ll need to work out how much you need to live on each year. This is what’s known as a Safe Withdrawal Rate. This means working out how much you spend every year, and then multiplying that number by the amount of years you’re planning on retiring for.

Of course, in practice this isn’t quite such a precise art, as we don’t know exactly how long we’re each going to be around for. No-one wants to miscalculate and spend their last few years selling all of their possessions!

Thus, you’ll want to leave yourself a little bit left over. That way, you’ll be able to leave something to your family, and you won’t need to spend time during your retirement worrying about whether you’re going to make ends meet.

Don’t be afraid to seek advice

Managing money is a skill that needs to be refined and mastered through practice – and some of us don’t take to it very naturally. If this is you, then it might, on balance, be worth investing in some impartial advice. A skilled and personable advisor should be able to apprise you of your options, including some technical and obscure ones which you wouldn’t otherwise have considered. They can let you know how feasible financial independence hopefully is, and what steps you’ll need to take in order to potentially get there.