Ten years to retirement? – Ten things to consider

The question of retirement planning is complex, with many considerations. Getting an expert opinion from a qualified financial adviser can be highly beneficial.

1.    When do you want to retire?

• At what age would you ideally like to retire?
• Will you wind down to retirement by gradually reducing your working hours or working flexibly?

2.    What, ideally does retirement look like for you?

• Start making plans. Draw up a ‘bucket list’. Do you want to travel or buy a holiday home, for example?

3.    Can I afford to retire?

• Consider what income you will need in retirement to fund your desired lifestyle and consider the effects of inflation.
• Do you want to have a part-time job?
• Do you have any maturing investments on or around your proposed retirement age?
• Check on your current pension situation – see 4. below

4.    Start planning now

• This is a good time to check on your existing pensions. What income are they projected to provide? Will they provide the level of income you require?
• Will your pensions allow you to draw benefits at your desired retirement age?
• How long into old age will your pension fund last?
• Do you know how your pensions are invested and how risky those investments may be?
• Consider any existing debts including your mortgage if you have one. Will these be repaid by retirement? Consider restructuring your debts to repay them earlier or, if you can, over-pay on the regular repayments.
• Consider making additional ad hoc pension contributions or increase regular contributions to further fund your pension.

5.    What options do I have?

• Most pension benefits can be drawn from age 55. 
• This includes the ability to take up to 25% of the value of the pension as a tax-free lump sum. Will you need this at age 55 or can you defer it? Does this alter your medium term plans?

6.    Other assets

• Do you have other assets to sell which will realise a large capital sum for your retirement e.g. the sale of a business. How quickly can that asset be sold? Is it something that needs consideration now?
• Perhaps you are considering downsizing your property in retirement.
• What other savings provision do you have?
• Do you have the capacity to cover a sudden and unexpected large expenditure now?

7.    Family considerations

• Do you wish to gift money to your family or help with grandchildren’s school fees for example?
• Consider making a Will or updating your existing one. 
• Consider drawing up a Lasting Power of Attorney 
• Who would you like to leave your pension fund to? Ensure you have completed an Expression of Wish for each pension you have.

8.    Major expenditure

• Do you plan any major expenditure prior to retirement? How will you fund this and will this impact on your retirement income?

9.    Consider later life

• Do you wish to make any provision to cover the cost of longer term care in old age? Insurance can be an option. Premiums will be generally cheaper (subject to underwriting) the younger you put cover in place.

10.   Get advice!

• As can be seen from above, the question of retirement planning is complex with many considerations. Getting an expert opinion from a qualified financial adviser can be highly beneficial.