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I am quite prepared, but want to check if there is more I can do

2 Comments
Retiring is often considered to be the final chapter of your life – when in reality it could prove to be the start of truly living. All being well you could have many years to enjoy retired life, and hopefully you will relish the opportunity to put yourself and family ahead of the daily grind of work.
 
Retiring is often considered to be the final chapter of your life – when in reality it could prove to be the start of truly living.
But if you do have many workless years to look forward to, a lot of retirement planning will be needed to ensure that you make the most of it. So whilst it is fantastic that you feel somewhat prepared, there is likely to still be more that you can do. 
 

Here are five things that you need to consider

 

1. Make sure your pension fund is suitably invested

It’s not just a case of paying as much as possible into a pension. Within your pot there will be at least one type of investment, and its performance could make a huge difference to your pension’s overall value and, therefore, your retirement income and quality of life. 
 
You need to consider if the level of risk your pension is exposed to is something you are comfortable with. 
 
  • If you are many years away from retiring, you might be prepared to take a greater level of risk.
  • If you are approaching retirement, it could be advisable to reduce the level of risk your pension is exposed to.
 
It’s not easy to determine by yourself how your pension should be invested, and the idea of getting involved in making such decisions might seem daunting. Some pension providers offer guidance and specific investment approaches that you can select. Alternatively, you could seek financial advice.
 

2. Consider and review any ‘frozen’ pension pots

Over the course of your career you may have changed jobs and employers along the way, paying into different pension pots. If you have a pension that you have not paid into for some time, this sum of money could still play a role in providing you with the retirement income you need and, as such, you should ensure you are making the most of it. 
 
One option might be to consolidate your different pensions into one fund, to save on fund charges. Make sure you check first, however, if there are valuable pension guarantees that you might lose by transferring them. 
 

3. Think about what you want to do in retirement

If you haven’t already, you need to seriously consider what you want out of retirement and whether you can realistically fulfil your aspirations
If you haven’t already, you need to seriously consider what you want out of retirement and whether you can realistically fulfil your aspirations. If you have a partner, make sure that you include them in these discussions too. It’s about setting expectations and then coming up with a plan to achieve your objectives.
 
 

4. Plan a retirement budget

Yes, retirement is a step into the unknown to an extent – and it can be hard to judge just what you will need financially. However, it might be worth looking at your current outgoings and assessing which costs are likely to remain applicable in retirement. Then consider the expense behind the extra activities you want to devote more of your time to (such as a golf membership or an additional holiday). 
 
By devising a budget you can gain a rough picture of your likely expenses – and a greater idea of what income you will need to achieve the retirement lifestyle you aspire to. 
 

5. Think about the unthinkable

No one wants to contemplate their own death, but there are certain financial considerations around it that are advisable to include in your retirement plans. 
 
Are you one of the 30 million UK adults who don’t have a Will? If your health were to suddenly deteriorate to the point you needed someone you can trust to make financial decisions on your behalf, do you have a Power of Attorney agreement in place? Would your estate be liable for Inheritance Tax, thereby leaving your loved ones with a 40% tax bill when you die?
 
These are not nice things to think about, but the consequences of failing to address them could be significant for your family. Give yourself and loved ones peace of mind by looking into them now.

Comments

This is all very sound advice. Dare I say it, point five is particularly important. I am staggered at the huge number of people who have no will. I didn't truly appreciate the implications of dying without a will until I got a one myself. Now I have one, I see how important it is. That's before you consider lasting power of attorney which is also vital to have in place.
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Got as far as step 2 and discovered that I'm heading for a massive tax liability due to the reductions in Lifetime Allowance. I'd thought I was doing the right thing by just putting as much into my pension as I could and it looks like it's more complex than that. Glad you prompted me to look more closely.....thanks
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