Three things you must do now to ensure a happy retirement

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While recessions are never comfortable experiences, they are a good time to reassess finances. This is particularly true when it comes savings and investing, says Robin Powell, author of How to Fund the Life You Want.

While we’re not yet officially in recession in the UK financial forecasters are concerned that the country is heading that way.

To weather the storm, people need to be prepared, ensuring, first of all, they have at least three months’ wages saved.

Robin Powell is an expert when it comes to pensions, savings and investments and said recessions don’t have to be the end of the world.

He told the first thing people should do is make sure they have an emergency fund.

Mr Powell said: “Ideally you should have at least three, and preferably six, months’ worth of ongoing expenses in an easy-access savings account, in case you or your partner is made redundant.

“If you don’t have that much saved, you should make saving an absolute priority.”

The good news is after many years of meagre savings rates, banks and building societies are now offering more competitive deals.

That aside, reviewing investments is especially important for people who are planning to retire in the next two or three years.

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Mr Powell said: “The blunt truth is that, unless you invest more money in the years ahead, your eventual retirement pot will be smaller than it would have been had it not been for this economic downturn.

“If you haven’t done so already, work out what you want to do after finishing work and what sort of lifestyle you aspire to.

“It may be that you’ll either need to invest more each month or work for longer, or possibly both.

“If you’re in any doubt, you should seek the help of a professional financial adviser with specialist expertise in retirement planning.”

Britons should be aware their capital is at risk with investment, and they could get less back than they originally put in.

For anyone who isn’t struggling to pay bills, recessions can provide a great investment opportunity.

The money expert added: “Unless you’re really struggling to pay your bills, keep drip-feeding money into equities, preferably via a low-cost global equity index tracker – If at all possible, try to invest a little bit extra every month.

“We’re in the eye of an economic storm right now, and the tendency at times like these is to assume that the storm will last indefinitely.”

“Remember, because markets have fallen, you’re buying in cheaper, and you’ll be be better placed for when prices start to recover.”

He continued: “But history tells us that recessions and stock market declines are perfectly normal events that come and go with surprising regularity.

“Of course, your immediate focus is on the here and now — protecting your income and budgeting wisely.

“But this storm too will pass. So stay calm.

“See the bigger picture. And focus on your long-term goals.”

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