The idea of retiring, taking things easier and enjoying pleasures you never had time for seems great. But not everyone can do that. Not everyone is financially prepared to stop working. Here are some checks and essential retirement planning tips to see if you’re ready to retire…

So much has changed in recent years. House prices have rocketed, people are living longer, and company pensions have changed. There are many things to consider before you can finish work. Sometimes the numbers just don’t add up.

This is especially true when you build in the various fear factors. There have been stories about shrinking retirement funds and uncertainty about the economy – especially either side of Brexit.

Suddenly, it’s not as easy as reaching a certain age, collecting the gold clock and deciding how to spend that pension payment each month.

Thinking about your future, making the best decisions and understanding the various scenarios that affect pensions should not be put off. Here are some things you should consider now:

When would you like to retire?

It’s an obvious question. Depending on your current age, the answer you give will help to shape your future wealth planning. It’s the kind of question we always ask our clients. We also ask what they hope to achieve in life, where they would like to be. Then you can build up a financial plan that will help you to achieve those goals.

How much do you need?

It’s a simple question. It’s about budgeting. How much does it cost to run your household each month? How much do you need to cover leisure pursuits, that new car every few years, those special events and exotic cruises? Add that up and you can determine whether your monthly pension will be sufficient to live the life you want.

Pension income and tax

Just because you finish full-time “paid work” it doesn’t mean that you stop paying tax. In the UK, you are still liable to pay tax on any income you draw that is above the personal allowance (in 2019, that is £11,850). Factor this into your monthly budget to ensure you have enough to cover the things you want to enjoy during retirement.

Don’t forget your state pension

For most people, the state pension forms a significant part of pension income. This is available to claim when you reach the State Pension Age, from the age of 65 (this will change in subsequent years depending what year you were born, to 66 years of age by October 2020). The Government is planning further increases which will raise the State Pension Age from 66 to 67 between 2026 and 2028. Currently, the state pension is £164.35 per week. This, plus any company pensions and part-time income should all be considered when calculating what you will have available across your retirement years.

Pension health check

You visit the doctor and dentist regularly, you also have your car serviced each year. Treat your savings, investments and pensions the same. Take good independent advice. Review how much you save, and track your funds so that changes can be made if required.

Build up some savings

If you are close to taking retirement, you will get ready to finish work and your pension payments begin the next month – right? Not always. There can be administration delays or details to sort out. Try to build up three months of living expenses to make sure you are not left short. Be prepared!

Retirement often seems a long way in the future. It’s something to consider next year, then the next year. While you are earning an income it might seem unnecessary to fuss about your pension details.

In reality, it’s wise to always have an understanding of how a pension fund is performing and whether it is on course to reach a value that will help you maintain your standard of living.

Taking independent financial advice can help you monitor the progress of your investments. It can give you the information you require to make the plans you have always dreamt About. It will help you to save appropriately in the years before you decide to take retirement.

If you need independent financial help, we’re here to offer some wise words about money.

Contact our friendly team now on 0808 1234 321 (freephone) or email info@logic-wp.com and we’ll arrange a convenient time to meet and chat.