What could you do as you approach retirement?

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What we'll cover

  • The eight-point retirement check
  • Budgeting in retirement
  • The big question

The age at which you decide it’s time to take life easy is a very personal choice. When the big R day arrives, you can throw away your alarm clock, say goodbye to your commute, and ditch those restrictive business suits.

Whether you’re planning on travelling, spending more time with your family or taking up a new hobby, it’s wise to check your financial plans to ensure you have the means to achieve your goals.

Hopefully, in your younger years, you did your research to make sure your retirement funds grew to the levels you need to enjoy a comfortable retirement. Well, even though the big day is now within touching distance, remaining vigilant to any changes in retirement account rules, benefits, and financial plans is a good idea, just in case they could have an impact on your retirement fund.

To help you focus, we’ve put together a list of eight things you might want to consider as your retirement approaches.

8 things you might want to consider as your retirement approaches

1. Track down your pensions

To best plan for your retirement, you may want to figure out how much income you’ll get from all your pensions. If you’ve lost track of pensions over the years, it can actually still be pretty straightforward to find this information.

If you’re unsure where to start, the UK Government offers a pension tracking service to help you find lost pensions.

2. When can you access your pensions?

Before you decide on the age at which you want to retire, it might be worth checking when you can start accessing your SIPP (self-invested personal pension). In the UK, it’s usually at the age of 55 (and will be moving to age 57 in 2028). However, other schemes may not allow access until you are older.

3. What’s your pension’s value?

It can be worth checking your pension’s value regularly as you approach retirement. This may help you stay informed about how much money you’ll have as you move into the next phase of your life.

4. Get a state pension forecast

The state pension may not be your primary retirement income, but it can be worth checking to make sure you qualify for the full amount. You can do this online through the Government’s website.

5. Find out the value of your other investments

If you have other investments or savings, such as an ISAs, it’s worth checking to see their value as you approach retirement age as they can support you in addition to your pension.

6. How will you access your pension?

Yes, there is more than one way to access your pension. You could opt for a guaranteed income by buying an annuity. You can take lump sums. Or you can combine the two. It all depends on your circumstances and what you want to get from your retirement.

7. How is your pension invested?

It’s never too late to review your pension. As you approach your desired retirement age, look at your investment strategy to see if it still satisfies your approach to risk. If you’re looking for a lump sum or buying an annuity, you could consult your financial advisor about potential ways to de-risk your exposure over time.

8. No need to do it alone

The way you access your pension is an important decision that could impact your retirement and the income you can expect to receive. That’s why it’s a good idea that you obtain professional financial advice before making any decisions.

Make a retirement budget

Once you know how much income you’ll have during your retirement, it’s time to draw up a budget. This can give you an indication of how much you’ll have to live on, so you’ll be able to see whether reality matches your expectations.

By the time you retire, you may well have repaid your mortgage. Your work travel costs will vanish, along with your pension contributions. If your children have flown the nest, the chances are your household bills could be smaller too.

It can be helpful to review both your retirement income and costs to ensure you’re in a comfortable financial place.

The big question

Reviewing your pension and budgeting are not the most exciting tasks, but they do pave the way for the big question: what are you going to do with all that time on your hands?

Making sure you’re financially sound for your retirement is vital, but so is your mental preparation. Going from full-time work to full-time retirement could be quite a culture shock.

Your budgeting exercise will show you what type of lifestyle you can afford, so get a plan in place, so the transition isn’t too much of a shock. You’ve worked hard all your life, and now’s the time to do what you want to do. The better prepared you are, emotionally and financially, the smoother the change will be.

The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.