This will be a landmark year for thousands of people – not just because it’s the start of a new decade but also because it’s the year when they will finally finish a lifetime of work and set out on a peaceful and happy retirement.
But if we want to make the most of our retirement we need to put in some serious research and planning first.
Jonathan Watts-Lay is an expert in financial guidance and advice and he has a series of tips for making the transition from work.
First things first, it’s important to know exactly how much money you have available to you because a pension isn’t the only way to finance your retirement.
Take a good look at what assets you have. You may be lucky enough to own some stocks and shares or other assets to add to the pot
Knowing what you have, how much it’s worth and how to pay the least tax on it is a good first step forward.
Have you worked out how much you’re going to need to finance your lifestyle to the level you would like?
Don’t presume it is the same as your salary because your personal situation is about to change. Independent children, whether they have flown the next or not, will be less of a drain on your income and you won’t have to pay all of the work-related expenses you have stumped up for over the years.
Will the loans finally be paid off? And the mortgage too?
If you have a defined contribution pension there are several ways to access your money – either through an income drawdown, buying an annuity for a regular retirement income, taking it as a cash lump sum or any combination of those.
Regulated financial advice is always worth listening to and there is also free and impartial advice and guidance available from the government’s Pensionwise service at pensionwise,gov.uk
It’s always a good idea to shop around and check out what’s available. Not all products are the sane and interest charged will vary too. Find something that suits your needs and your pocket.
Ensure you don’t pay any more tax than necessary, as a general rule of thumb the first 25% of your savings is tax free and the remaining 75% will be taxed as earned income
Beware of the scammers
Finally – be aware of the scammers. It is a sad fact that an increasing member of people have aaved all their lives for a happy retirement only to have their cash stolen in a scam whoch seemed too good to be true.
“If it looks and sounds too good to be true, it probably is!”