‘Phased retirement’ is becoming more common. The way we access our pension is now a lot more flexible, and it’s no secret that in the UK we’re living longer than ever before. A longer retirement and more choice over how you take your pension make for an exciting time. And planning ahead will help ensure you’re on track to a financially secure future. Our timeline will help you get started.

         

Although retirement can still seem a while away, begin to consider what you want your life to be like when you get there.

         

Ten years before you plan to retire

        Here are some things to think about as you start to build your plan:

         

The age you’d like to retire

            How much you’ll likely have in your pension fund/s, and the income you’ll need when you retire

            Any savings, investments or other assets that you could add to your retirement income

            How your living expenses could change in the future

            How you’ll pay for any travel, hobbies or further education once you’ve retired

            An emergency savings fund, to help with any unexpected costs like car or home repairs

            Paying off any debts before you retire

            How you’ll support your dependants once you’ve retired

            Putting money aside to pay for long-term care for you, your partner or other dependants

         

Don’t forget that your spending habits are likely to change in retirement. For example, your commute costs are likely to be lower, but more time at home may mean your utility bills go up.

       

Five years before 

            you plan to retire

            Now is the time to make sure your goals are on track:

         

Decide the age you’re likely to retire

            Consider phasing your retirement and continuing to work part-time for your current or a new employer

            Boost your pension by increasing your contributions and/or adding lump sum payments (take advantage of any unused pension tax allowance)

            Trace any lost pensions through the Pension Tracing Service

            Ask for up-to-date statements for all your pensions. You can also get a forecast of your State Pension at www.gov.uk

            Look over your investments and savings to see if they still meet your attitude to risk as you get closer to retirement

            Think about whether you’d like to take an income from your pension or whether you want a pot of cash, including any tax-free allowance, to do something different in retirement

            Discuss your options with a professional financial adviser

            Write a Will or review your existing Will – and plan what will happen to your pension and estate if you die, plus any tax implications.

         

Six months to go

        It’s time to give yourself a retirement readiness check-up:

         

Review your pension statements to get an accurate picture of what your funds are worth

            Make an appointment with your professional financial adviser for advice on the best retirement options for you

            Determine the best option/s for taking your pension savings to meet your financial and lifestyle needs

            Tell your pension providers you’re planning to retire, so that they can send you any and all information you need in plenty of time

            Update your beneficiary information

            Set a date for a pre-retirement meeting with your employer

            Let the HM Revenue & Customs (HMRC) know you’re retiring because your change of status will affect your tax code

            Budget for changes in your day-to-day spending after you retire

         

Twelve to eight weeks before

        It’s down to business now – you’re just outside of your selected retirement date:

         

Speak with a professional financial adviser to consider your options and retirement plans

            Ask your provider about the ways you can access your pension based on the options available

            You should receive a letter four months before you reach State Pension Age, telling you how to claim your State Pension. If you haven’t received this by three months before, here’s how to claim this

            Look into any entitlements from the Government over and above any State Pension you may get, as these could make a real difference to your living costs

         

Eight to two weeks before

        The final countdown! It’s time to make sure you have all the information you need to help make a decision:

         

Consider any retirement quotes that your provider may have sent you

            Remember, if you want to use your pension to provide an income, you should shop around the different providers to get the best income you can. If you and/or your partner have a health and/or lifestyle condition, then you could get an even higher income as different providers also cover different conditions

            You’ll also need to apply to your provider/s if you’re moving pensions from different sources

            There you have it – happy retiring!

         

PENSIONS ARE A LONG-TERM INVESTMENT.

         

THE RETIREMENT BENEFITS YOU RECEIVE FROM YOUR PENSION PLAN WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE VALUE OF YOUR PLAN WHEN YOU DECIDE TO TAKE YOUR BENEFITS WHICH ISN’T GUARANTEED, AND CAN GO DOWN AS WELL AS UP.

         

THE VALUE OF YOUR PLAN COULD FALL BELOW THE AMOUNT(S) PAID IN