The dreaded age of fifty-ten (the one that comes after fifty-nine) might seem a long way away – or not. But younger Saga Magazine readers (or older readers’ children) are looking forward to it. Remember, at 60 (there I’ve said it) you still have seven years before all those taxes you’ve paid are turned into a state pension. So you should be planning now to make those years beginning with a six – and those that follow – good ones.
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Pay off debt
More and more people head into retirement with interest on debts draining away at the money they have worked hard to earn. Regular debt of £1,000 on a credit card could be costing you £4 a week in interest before a penny is paid off the debt. If there is usually £5,000 on your card (and be honest here) it can easily cost £1,000 a year. Wasted, poured into the coffers of banks which, trust me, don’t need it. If you are a habitual borrower, set out a plan to be debt-free by 60. Pay off the credit card and any other high-interest loans. Then move on to the others. Then overpay your mortgage. Being mortgage-free is one of the most joyous things about getting older.
Annie Shaw on how to be better off this year
Money is about doing what you want. Enjoying yourself. Why not plan now to have a year off in your sixties? Travel. See and do all those things you always wanted to do and see. But what with kids, and relations, and debts, and work – it just hasn’t happened. Now it can. Take that gap year you never had, but which many young people now seem to take for granted. And yes, you can afford it. Start cutting costs and saving now. If you own your home, you could take out equity release to pay for that year off – the later in life you leave it, the more you can borrow. Or while you are away you could rent the place out. Make the house work for its living.
Is Equity Release right for you? Find out more here
Get rid of storage
Storage is a racket. I have had storage units and filled them with stuff. And every month I paid more to the storage firm than the entire contents of the small, unlit, unheated room were worth. Try it. Add up the actual monetary value of everything in there. Not what you would get if you sold it – almost nothing I suspect. But the cost of buying it all again, new. A month’s rent? Two? So why store it? I know that some of it is priceless, some has great sentimental value. So digitise the photographs. Give up your grandma’s sewing basket. Give those clothes you just might wear one day to Oxfam. Don’t leave your children or friends and relatives to sort it out. Sell it now and save yourself the thousands of pounds a year it can cost you to keep it.
Top tips for decluttering and downsizing
Pay into your pension
Once you are over 55 you can take money out of your pension when you want. I’m not suggesting you do. I suggest you pay more in. Money going into a pension bypasses the taxman. So it gets a big boost on the way in. And you can take a quarter of it out tax-free whenever you like. You can take the rest out too, but it will be taxable. So pay more into the work pension – your boss may add more still – or into your own personal pension. Make sure charges are as low and investments as safe as they can be.
If you have a long-term partner, then get married. What could be more fun than marrying the one you love? Married couples have tax and other advantages over two singles living together. Especially when one of them dies. The survivor then gets the whole of the estate – including crucially the home you both live in – free of inheritance tax. Of course, you have to be sure he or she is The One, but The One who is left behind will be more financially secure if you are married. Unmarried bereaved people have almost no rights. In Scotland they have some, but still way less than a widowed spouse.
Should you move in together?
Every week I get emails and letters from people who have been robbed. Not in the street, but at home sitting in front of their computers responding to friendly people who have emailed or phoned and are offering a guaranteed return on their money that is a great deal higher than deposit accounts and more certain than investing in shares. They are thieves. Always. Or at least, you should always treat them like thieves. Put the phone down. Ignore the email. Delete the text. No one ever lost money by doing that. Many have lost everything by responding. Avoid get-rich-quick schemes. People with money have generally got rich slowly. Patiently. Sensibly. Now that’s a target for 60.
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