Your final year to Retirement
The countdown is on...
This close to retirement, you might be forgiven for thinking there’s not much you can do now that will change anything.
There are limitations, of course, but there are also things which can help ease this transition from living off an income to living off your savings. From working 9–5 (OK, more like 8-6) to having a lot more time to yourself.
Before you read on, though, can I suggest you take a look at our check list for people with 5 years to go. If you’ve missed anything off that, make it a priority.
Once you are happy, though, how about trying out these…
✓ Take a trial
You know what you are expecting from your budget in retirement. So, before it becomes reality, why not try it out for a week, see how you actually get on?
You may be within only a few months of reaching the actual date but if things don’t quite work out, you’ve still got some time to consider what you might change. And you may be pleasantly surprised by how you get on.
✓ Think about transport
Think about how you are going to get about when you are living off income from your savings. For example:
Is the car you have too big / too small / inefficient on fuel or insurance costs?
If you are running two cars, could you sell one?
Are there subsidies you can get for using public transport?
✓ Health checks
Before you leave that job - and all the added benefits it might bring with it - are there anything you should use, one last time?
A health check for example - which can be useful for two reasons:
You can often get a discount on the check – or even get yours free – while a member of a company medical scheme, a benefit which will disappear when you leave.
It can highlight – or rule out – medical conditions that might help you enhance the level of retirement income you could get.
Unlike many other financial products - where poor health might result in your cover being more expensive - the opposite is true in retirement. If you want to guarantee some of your income for life, such issues can actually work to your advantage. And result in you receiving a higher income.
Which could make a big difference to your lifestyle in those coming years.
✓ Update your will
As if you didn't know this already, retirement is a significant change to your circumstances. It is therefore a good time to review the wishes set out in your will.
Doing so also gives you the chance to consider any Inheritance tax issues you might not be aware of. And whether you need to make plans to mitigate its impact on beneficiaries.
Finally, whilst this is unlikely to be an immediate issue, you may also like to think about nominating a future power of attorney. Just like the will itself, nominating someone to help you out in the event something unforeseen happens gives you peace of mind you won't have to worry about it later.
✓ Talk to an expert
Thanks to pensions freedom, you now have a wide choice of ways to take money from your pension fund. Each choice comes with its own costs, risks and tax treatment, and what combination will suit your situation could therefore be quite different from what suits your friend or next door neighbour.
Either way, you should first make sure you take advantage of your Government's (FREE) guidance session. This is a half hour consultation, designed to outline what your options are so you understand what type of decision you have to make. Run by a combination of Citizen’s Advice and Pension Wise, these consultations are held either by phone or, occasionally, face to face.
All you have to do is book yourself in.
You might also decide you would like to speak to a regulated adviser - to help you decide which of the options you have is the best one for you.
✓ And finally
Hand in your notice. Plan your leaving party. Relax and begin to enjoy.
Because the longest holiday of your lifetime is about to begin…