For many of us, retirement is the reward after years of graft and hard work. The dream retirement can look different for everyone, from travelling around Europe to moving to a new town to finally renovating your kitchen.
Whether you plan to retire in 2025 or are just beginning to consider your retirement possibilities, it’s important to plan ahead to make sure you achieve your goals.
To keep you on track in achieving your retirement goals, we’ve listed key essentials of what you could do to benefit your future.
Build a plan
As obvious as it may sound, building a retirement plan is one of the most important steps in planning for your retirement. Arguably, this is one of the most exciting stages of your retirement journey, as it lets you decide your objectives and achieve them.
Fluctuating inflation rates have disrupted people’s financial plans in previous years, so it’s crucial to be proactive and prepare in advance.
To ensure the solidity of your retirement plan, you need to make sure you have given thought to several crucial aspects, including your ideal retirement age, the lifestyle you’d like to live after work, and how you aim to fund it. All these details can help build a sturdy foundation to base your retirement goals and help drive you to a resolution to fulfil them.
It’s also important that you understand how much money you have, which can be done by checking the total amount you have in your pension pots, investments or any other funds you have saved that you intend to use. By being aware of your funds, you can begin to understand your current situation and what income you’d be living on in your retirement.
When considering your plan, take a look at your current way of life, e.g., the number of holidays you currently take a year and what bills you are paying and will continue to pay in your retirement. What kind of income would you need to maintain this, and if changes to your lifestyle are needed to be made to accommodate your income in retirement, what could these be?
Whether you wish to live a lifestyle focused on travelling or one closer to home dabbling in new hobbies, the majority of your retirement income will be funded by your pension pots, so it’s important that your plan is realistic and within reason.
Check your pension statement
Your pension statement is the document to read when you want to know what contributions you are currently making to your pot, its current total value, and any added charges, such as a platform fee, fund management fee, or annual management charge.
Typically sent annually by your provider, your statement may also provide a projection of the potential total you may receive when you retire. Of course, this is just an approximation and should be taken as such - no one can predict the returns an investment market might bring. Should you not have a recent pension statement, you can request this be posted to you by contacting your pension provider.
Overall, your pension statement is a valuable tool to steer the course of your retirement strategy. In addition to offering a glimpse of what kind of income you could expect to receive, it can help you avoid paying unnecessary additional charges.
Utilise your tax-free cash
Did you know that if you’re over 55, you could have the option to claim up to 25% of your pension as a tax-free lump sum, giving you a significant cash enhancement and a stepping stone to your retirement goals? Say you had a total pension fund of £200,000. You could take a whopping £50,000 of this as a lump sum without any tax being deducted from it. This lump sum could help fund travelling plans or a dream renovation or even help clear any remaining debts, so it’s definitely a tool worth considering for your retirement plans.
Seek financial advice
Journeying through building a retirement strategy does not need to be a challenge you face alone. Whether you face financial uncertainty or want to know how you can make the most of your pension, you can always seek financial advice. Although advice may incur an extra cost, the support received is ultimately invaluable for helping you unlock your pension potential.
What’s more, as regulated advisers, the Financial Services Compensation Scheme fully protects your money, so there’s no need to worry about any potential losses!
At My Pension Expert, our team of independent financial advisers take your circumstances into account in order to build a retirement strategy catered to your goals. Any personalised recommendations we make are provided on the basis that you fully understand them and how they benefit your retirement plan. To summarise, our services are built to take all the stress out of planning what should be one of the most exciting stages of your life!
Kickstart your 2025 and see how we can help, today!
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My Money Expert has been helping the UK to unlock its financial potential since 2010. Rated 5 Stars on Trustpilot, we offer regulated independent financial advice on a variety of areas including investments, ISAs, pension consolidation and retirement planning. We’re proud to be a B Corporation and are committed to doing right by our clients, as well as the wider community.