Many residents of Finland worry about the small size of their future pension, and the changes to their lifestyle that may result.

Two Finnish organisations, theMartha Foundation (Marttaliitto in Finnish) and theGuarantee Foundation (Takuusäätiö) are now providing a free online coaching service which aims to help retirees anticipate future financial difficulties and prepare in time for the new reality.

The main targets for the online coaching are people who are still in employment, but who will retire five to 10 years from now.

"In thisManage Your Money online coaching site (in Finnish), the idea is that you can still make small changes within five to 10 years," Martha Foundation Project CoordinatorErkki Ukkola explained. "It is always better to start preparing early, but even 50- and 60-year-olds will have time to adjust their consumption and see that they can pay off their debts before retiring."

Pensioners' debt problems causing concern

A clear increase in the number of debt problems facing retiring and already-retired people in recent years was one reason why the two organisations felt the need to provide coaching.

"The Guarantee Foundation has observed that if there is debt when you retire, and the debt situation has not been thought about in advance at all, you will easily run into payment difficulties," said the foundation's Development ManagerMinna Markkanen.

She added that it was important to remember how it often comes as a surprise to quite a few people that retirement affects both finances and lifestyle.

Markkanen said coaching involves getting people to seriously consider their retirement plans.

In addition to determining future pension payouts, key themes include monitoring and budgeting income and expense levels, examining possible debt issues and savings plans as well as housing costs.

"We strive to give practical, everyday tips about what to start doing. It's not necessarily a question of any big changes, but even with a little planning, monitoring and everyday changes, big things can be achieved," Markkanen said.

Below are six tips to help prepare for the financial challenges of retirement.

1. Find out the amount of your future pension

Preparing for retirement begins with finding out how much you will receive in the future. Check your accrued pension so far on your employment pension statement and get an estimate of the amount of your future pension. You can find them on the website of your own employment pension company or theFinnish Centre for Pensions.

Kela also pays a national pension and a guarantee pension when your earnings-related pension is small or has not accrued at all.

"It is very likely that incomes will decrease when you retire," Martha Foundation project coordinator Ukkola explained.

"Not everyone may be very aware of how much they will shrink. On the other hand, many people think that retirement isn't coming just yet, and because of this, they've not been able to prepare for it in time. In coaching, the goal is making people take their head out of the sand and look the matter straight in the eye," she said.

2. Review your current financial situation

When you calculate your current income and expenses, you will have a better idea of your current financial situation.

Once you’ve figured out your retirement income, you can also start thinking about how you’ll be doing with a lower income in the future.

There are many ways to prepare for and adjust to one's future financial situation, for example by reducing consumption, saving money or by planning to work longer in order to build a larger pension.

3. Prepare by saving

Monitoring your own finances is also important in finding ways to make everyday savings.

"When you know roughly where your own money is going, it is easier to look for possible savings," Ukkola said. "Either by saving for a rainy day or by saving in a fund, you can create a little bit of a buffer for yourself during retirement."

The online coaching provides everyday savings tips and helps you save money toward that goal.

4. Debt-free retirement

In previous generations a popular goal was retiring debt-free, but this has changed in recent years.

"Now, for example, relatively large mortgages are taken out at the age of 50," Ukkola said. "And of course, we currently have a fairly consumer- and debt-focused society anyway: we take various consumer loans, flexible loans, instant loans and buy in installments."

Online coaching raises the question of whether or not you will be able to handle debt repayments when your retirement income is lower. And if you can, will there be money left to live on?

5. Consider future living arrangements

Retirement, and ageing too, can bring major changes to living arrangements.

"It is worth thinking about them in advance, and not just at the stage when retirement begins," Markkanen advised.

Household living costs can be especially high. Therefore, it would be good to consider in good time whether or not your current home will meet future needs, for example in terms of size, monthly costs and location. And will your retirement income be enough to cover unexpected major renovation costs like plumbing repairs?

6. Live for a month on your future pension

Once you’ve figured out the amount of your future pension, try living on that amount for one month to see if the money will be enough to fund the retirement you imagine.