Paul Farrugia
Retirement. For some, it’s a long- awaited reward after decades of hard work. For others, it’s a leap into the unknown. Whether you’re counting down the days or just starting to think about life after work, one thing is certain: a well thought out plan can make all the difference.
At Equilibrium, we believe retirement should be a time of freedom, not financial stress. So we’ve pulled together a practical checklist to help you prepare with confidence. Think of it as your personal roadmap to a fulfilling and financially secure retirement.
Gain clarity on your pensions
Start with the basics: your State Pension. Check your forecast on the government website.(1) If there are gaps in your National Insurance record, you might be able to top them up. This can be especially important if you’ve already stopped working.
Next, gather details on all your private and workplace pensions. Are they invested appropriately when taking your plans into account? Do they offer the flexibility you need? It’s also worth reviewing the death benefits and your tax-free cash position. If you’re in your final working year, think carefully about whether a final lump sum might be worthwhile.
And don’t forget those “lost” pensions – services like the Pension Tracing Service can help you track them down.(2)
Map out your spending
Retirement spending isn’t static. You might spend more in the early years – holidays, hobbies, helping the kids – and less later on. Create a spending forecast that includes one-off costs and compares your pre- and post-retirement budgets. What expenses will disappear? What new ones might arise?
Also, think about how your spending might change in later life. Will you need care? Will you want to downsize? Preparing for these changes in advance can reduce uncertainty in the future.
Review your savings, investments and debts
Take stock of your savings and investments. Are they working hard enough for you? Could you improve tax efficiency, especially between spouses? If one of you has little or no taxable income, there may be opportunities to reduce your overall tax bill.
Now’s also the time to look at any outstanding debts. Should you pay them off before retiring? And do you have an emergency fund – ideally, enough to cover several months of essential spending?
Understand your income strategy
Where will your income come from in retirement? Pensions, ISAs, rental income, dividends? Make sure you understand the tax implications of each source. A well-structured withdrawal strategy can make your money go further.
Cash flow planning is key. Run different scenarios: What if inflation rises? What if markets dip? A good adviser can help you stress test your plan and explore safe withdrawal rates (like the often quoted 4%).
If you’re retiring mid-tax year, you might benefit from lower tax on your final year’s earnings. And if you’re married, the marriage allowance could also help reduce your overall tax liability as this allows one spouse or civil partner to transfer a portion of their unused personal allowance to the other spouse or civil partner.
Think beyond finances
Retirement isn’t just a financial shift; it’s a lifestyle one too. What will your days look like? If work gave you a sense of purpose, how will you replace that? Volunteering, part-time work, education or new hobbies can all help fill the gap.
It’s also a good time to review your legal affairs. Are your wills and powers of attorney up to date? Have the practical implications been considered, such as, who will inherit what? Are there sufficient liquid assets to meet any tax liability? We often consider this through our dress rehearsal.(3)
Have you considered how property fits into your long- term plans – whether that’s moving, downsizing, or making adaptations?
And don’t forget healthcare. If you had private cover through work, do you want to continue it? What about life insurance or income protection – are they still relevant?
Family matters
Do you still have parents around? Their future might impact yours – emotionally and financially. Do you need to support them? Are you likely to receive an inheritance? Having open conversations now can help everyone plan better. (4)
Check in with yourself
Finally, ask yourself: How do I feel about retirement? What are my hopes and my worries? What would make me feel truly comfortable stepping into this next chapter?
Retirement is a big transition, but with the right planning it can be one of the most rewarding stages of life.
The article is intended as an information piece and should not be construed as advice. If you would like help turning this checklist into a personalised retirement plan, call us on 0161 486 2250 or reach out to your usual Equilibrium contact.
