Planning for your retirement: How to plan for your retirement

Eventually, you will reach a point where you either don't want to work or can't work any more. Which is why it's so important to plan for your retirement. After all, it's when you can spend more time doing what you love. After all, you’ve earned it. That could mean family time, travelling, or playing bowls. Planning early helps you save enough to enjoy retirement.

Keeping track of your pensions throughout your life

In your lifetime, you are likely to have a few pensions. Especially if you worked for several companies.

Keeping track of these pensions is key to saving for retirement. As it helps you from being able to know if they are performing poorly. Therefore, be able to change the plan and prevent a loss. Combining your pensions into one pot might be beneficial, so you don't lose track of them. Talking to one of the financial advisors on Regulated Advice can help you decide what is best for you.

Decide what age you can retire.

In the UK, there is no longer a set retirement age. You can continue working for as long as you like or need to. 

From age 55, if you have a defined contribution pension, you can access it with a flex drawdown. However, accessing it earlier may reduce the money available for your entire retirement.

Continuing to work part-time can be a strategic approach to retirement. It allows you to gradually reduce your working hours. Which can help you ease into retirement and maintain a source of income.

When you were born determines when you can claim your state pension. You can check when you will become eligible on the government's website.

Work out what your likely income is

Gather information about all your company and personal pensions. You may need to track down pensions you've forgotten about or lost track of over the years. Contact the HR department of former employers or pension providers if necessary.

Calculate the current value of each of your pensions. This may involve obtaining statements from your pension providers. If that’s not possible, use a compound calculator to conduct a pension valuation. You can forecast the value of your pensions by using an online compound calculator. By multiplying the growth level or annual interest of 5% by the number of years until you would like to retire. 

Alternatively, work with a financial advisor to estimate your pension income. They can help you see how your savings turn into retirement income.

Find your state pension entitlement using the government's online forecast service. 

Finally, factor in any other sources of retirement income. Such as part-time work, rental income from property, or any other assets.

Things you need to do near retirement age

Ensure your tax code is correct. It should be 1257L. It is the most common code. And is not due to change until 2026, meaning your tax-free total is £12,570 per annum. If paid monthly, it would be £1,047.

Consult a financial advisor on when to take your tax-free cash. And feel free to discuss other options. Such as purchasing an annuity or taking an income drawdown. They help you understand how your pension savings translate into retirement income.

Also, contact the Department for Work and Pensions to determine when you will start drawing your state pension. As well as where you would like your pension paid.

Consider all your options.

Once you know what you want in retirement, you can start putting a plan into place. There are so many retirement options out there. From purchasing an annuity to taking an income drawdown and lump sum. 

You may also have other investments or assets to help you through retirement. 

Get expert advice

If you have a plan, it’s always worth speaking to a financial advisor. Let Regulated Advice match you with a financial advisor for expert advice.