After decades of hard work, is this year finally the year you’re able to retire? If you’re planning to retire before the end of 2021, here are a few tips to make sure you’re ready for life after work.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Check on your pensions
The government offers a way to check how much and when you’ll get your state pension with the State Pension forecast tool.
The state pension you will ultimately receive will depend on your National Insurance contributions, but as of 2020/21, the maximum pension pay out is £9,110.40 a year, which works out to £175.20 a week.
Next, take a look at how much your workplace pensions are worth. Over the years, you might have had a workplace pension or even taken out a private plan yourself. Your annual statements will show you how much your pension is worth or if your provider has the information available via their website, you might be able to check online. On top of that, a few months before you reach your agreed upon pension age, you should get an information packet to help you get started in the process.
If you’ve lost track of any pensions over the years, you can track them down via the government’s Pension Tracking Service. Just enter in the details of the employer or pension scheme and you should be able to access details of your lost pension.
Once you know how much you’ll get from all your various pots, consider how you want to receive your money. You can take up to 25% from your pension as a tax-free lump sum and with the rest, you could use drawdown as a way to receive an income or you could buy an annuity. Alternatively, you can withdraw cash only when you need it and let the bulk of your money continue to grow without worrying about any tax implications.
Review your finances
After your pension has been sorted, take some time to review your other savings and investment ventures as well as any outstanding debts.
Besides your pension(s), you might have had other savings or investments meant to fund your retirement. Check in on your ISAs, savings, property, and any other assets. If you have any debts, make sure you’re close to paying them off or have a plan to do so without losing out on crucial income once you retire.
When planning for your retirement, you should have calculated how much you would need to live the lifestyle you desire. Do a quick review to ensure that figure hasn’t shifted drastically. If it has, rework any elements that you can to ensure you can still afford everyday living expenses and any other extras you’ll want, like entertainment, hobbies, and holidays.
Get advice
Chances are, you’ve already been working with a trusted independent financial adviser (IFA) in the run up to retirement, so be sure to reach out to your IFA when you’re coming close to your desired retirement age. Choosing how to access your money is a big decision with various implications, so it’s important to make the right decisions.
At Dental & Medical Financial services, not only will we help you with your pension and retirement planning, we’ll consider your entire financial strategy to ensure you reach your financial goals. No matter where you are in your retirement savings journey, we’re happy to help get you on the right track. Get in touch with us today.
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