Your Pension Checklist: 6 Things You Need To Know About Preparing for Retirement

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Planning for retirement is a critical step in preparing for this stage of your life.


Planning for retirement is a critical step in preparing for this stage of your life as you will need to have a true understanding of the financial implications and the standard of living available based on the wealth you have created.

Your pension checklist

Here are the six key areas to consider to ensure there are no surprises once you reach retirement and so you can live the lifestyle you desire.

1. What will your Income requirements in retirement be?

It is imperative that you understand the capital and/or income you and a spouse/partner, if relevant, will need in retirement. Depending on the age you decide to fully or partially cease work, you will continue to have the financial commitments such as utility bills, council tax, maintaining a car, and so on.

Have you sat down and worked out your known ongoing financial commitments as well as the cost of the added extras we all strive to enjoy such as large items of one-off expenditure or regular holidays in the sun?

The Money Advice Service have a budget planner on their website that can help you take control and fully understand your ongoing financial requirements.

2. What will your capital needs be in retirement?

If you have built up pension benefits, you will have the option of taking a tax-free cash sum from your pension. Many savers decide to take the lump sum due to the tax-efficiency and desire to have a capital value available.

Any lump sum can be used to pay for one-off purchases such as a dream holiday(s) or you may elect to reinvest for future growth and income. You should consider the benefits of financial advice if you have a large capital value to invest to ensure you give yourself the best chance of growth.

Taking a lump sum from your pension will reduce the amount of income available and could therefore impact your ability to fund your retirement longer-term if you spend the tax-free cash too soon.

For expert advice on financial matters why not book a call with a Financial Adviser from Integrity365. Email Integrity365 directly for more information.

3. What’s your State Pension entitlement?

Do you know your state pension entitlement, and will this be available to you at the point of retirement or at a later date? With state pension age rising (typically age 67 for many individuals at present), it is not uncommon for individuals to retire ahead of receiving their state pension as they want to enjoy retirement whilst being younger.

If you have not done so already, you should obtain a state pension forecast which will tell you the value of your state pension and the date it will become payable. You can obtain a forecast online on the website.

4. Planning to help loved ones in the event of death

You are likely to have a spouse, family or friend that you would want to support financially in the event of your death. Depending on the assets you have accumulated for retirement, different tax treatments and options will apply.

You may well (hopefully) have arranged a will to indicate how your estate should be treated, but have you considered whether the assets you have build up are in the best place to protect the interests of your beneficiaries in the future?

You may have a good understanding of the assets you have built up, but this may not be the case for your loved ones. Providing them with a clear understanding of the assets in place will increase their confidence to manage these, if needed in the future.

You may need to consider the services of a legal or financial expert to help guide you and your family in the future, the early this is done the better.

5. Check how your retirement provision is invested

Many of us may have taken out our pensions and saving plans many years ago and may not have kept on top of how the plans are invested. It is possible that the level of investment risk you were prepared to take at outset is very different to your thoughts at the current time.

In addition, the timing of when you may access any plans has also reduced so you should look to ensure that the asset allocation and ultimate suitability of the underlying investment funds suit your needs at this time and into retirement.

6. How will you care for your wellbeing in retirement?

Throughout your working life you may not of appreciated the amount of time and focus your career has taken. Once you retire, you will suddenly have a great deal of time available to you and it is important you remain physically and mentally active.

Creating a healthy routine of regularly going out for a walk, spending time in the garden (weather permitting), or maybe a sporting pastime is important to remain fit and well.

In addition, it is important to consider your mental wellbeing and challenge your mind in a positive way. We all have different interests from reading to crosswords to new hobbies. Whatever is of interest to you is important throughout your retirement.

Try to remain as sociable as possible with friendship groups outside of your household. You may find spending 24/7 with your partner has an adverse effect on your relationship as you do not have your own space like you did when working.

Getting the right balance is clearly important but retaining your own social independence is vital for relationships and often overlooked when someone retires.

Ultimately, prepare well for your retirement and enjoy it when it comes along.

Written by Craig Pritchard Dip PFS, Senior Corporate IFA Consultant, Integrity365.

Customer service is at the heart of everything Integrity365 do, from the early days of pensions and ISAs to investments and lump sum decisions, through to retirement and later life planning, they are here to support you through the key stages of your life with a holistic approach to financial planning.

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