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FRIDAY Five: 5 Wise Financial Moves for Five Years Prior To Retiring

Each week in our Friday Five, we provide five quick tips about a different topic of interest. Interested in seeing a particular subject discussed? Send an email with your FAQ to info@dentalandmedical.com.


This does not constitute advice and advice should be sought in all instances before acting on it.


It’s common knowledge that you should start preparing for retirement as early as possible to ensure you enter your golden years ready to enjoy them. In the final few years leading up to a life of (hopefully) rest and relaxation, everything might seem a bit more real.

There’s no need to panic though, because here are five things you should do five years before you retire to make sure you’re ready.


1. Work out your budget

Five years away from retirement is the perfect time to calculate and review your budgetary needs. Firstly, start by figuring out all your static monthly expenses (mortgage, bills, taxes, insurance, etc), then estimate how much you spend for work (commuting, clothes, etc), and finally add in how much you think you’ll spend on retirement related expenses like holidays and hobbies. If you’re concerned about cost, now is the time to cut back on spending so you won’t need to worry later.

2. Don’t forget your tax reliefs and allowances

Five years is plenty of time to do some last minute saving, especially if you take advantage of the tax relief and personal allowances in your tax-advantaged retirement accounts. From pensions to savings accounts, there’s plenty of tax relief to be found and contribution limits to hit. Ensure you spend your final five years working maxing out the relief and allowances.

3. Get rid of your debt

There’s nothing worse than seeing your retirement pot dwindle unnecessarily because you weren’t able to pay down your debt prior to retiring. Tackle credit cards and small loans first to eliminate high interest rate debt. Then chip away at your larger debts as much as possible; prioritise your mortgage so you can own your house outright. One less cost to worry about it!

4. Know your pension benefits

Wrangling all the pensions you may have contributed to over the course of your career might be troublesome, but it will be worth it in the end. Calculate how much you’ll be receiving from your various pots so you know where else you might need to supplement savings.

5. Construct an income withdrawal plan

Hand in hand with your budget is your income withdrawal strategy. Many individuals don’t consider the fact of how they’ll draw down their assets. The preferred strategy is the bucket method. This plan assumes that the economy will experience some ups and downs, so it’s wise to siphon off your income into “buckets” designated for certain periods of retirement. i.e. you’ll have different goals for years 1-5, 6-15, and 16+.


Speak to us about your retirement plans

If you’re in the midst of planning for retirement – no matter how far along in your career you are – and want some professional guidance, don’t hesitate to get in touch with us today.


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