In the last of our series on age-related financial planning, we’re covering the golden years. If you’re already in your 60s, you’ve probably been thinking about your retirement for quite some time. Whether you’re intending to use your new found freedom to potter in the garden or party in Ibiza, we’ve got your back.
- Stay on course
If you’re going to keep working for a while and won’t retire until your mid-sixties or later, then you should just carry on as you did in your fifties – continue to save, eliminate debt and keep your plans on track.
It’s a good idea to check the level of risk you’re taking with your pensions. You don’t want a sudden stock market crash the month before you retire, for example, to reduce your tax free cash amount and pension pot size at this critical moment. You might want to consider moving into less risky assets like bonds and cash.
- Get organised
If retirement is round the corner, you need to get your pensions and other investments in order. Check that you don’t have any old company pensions and bonds languishing somewhere. Calculate all your potential sources of income in retirement (remember to include the state pension, ISA investments and company and personal pensions).
- Make a budget
It’s time to get your geek on. Crack open Excel and write up a budget of everything you spend now. Then make a second spreadsheet for ‘retired you’. You can leave out commuting costs, fancy work clothes and that daily latte that got you through the work day. Consider what you might need to add in – will you want to travel more? Devote more time to a hobby?
Budgeting will help you to avoid the common mistakes – overspending in the first few years of retirement and underestimating your lifespan. Thirty years of retirement or more is increasingly common.
If you can see that there will be a shortfall, you have a couple of options: plan for a lower standard of living or do something about it. If you go with the latter, you could choose to retire later meaning your retirement pot won’t have to last as long or you could consider deferring your state pension, so you get higher payments.
- See your Financial Adviser (*Yoohoo! Over here!*)
The options around taking your pension are vast – too detailed for this article without turning it into ‘War and Peace’. What we will say is that retirement is possibly the most important time to work with your financial adviser. The decisions you make now may affect your standard of living for the rest of your life. If you are wealthy, then your adviser can also help you get to grips with inheritance tax and protecting your estate from the tax man.
- Check your will
While you’re discussing estate planning, make sure your will reflects your current wishes. Whether you want to leave your money to your children or the donkey sanctuary, it’s important that the choice is yours.
- Consider private medical insurance
Unless you’ve been living on spinach juice and chia seeds, not many people reach their sixties without a few health concerns. Now’s the time to give some serious thought about private medical insurance or long term care planning.
- Think about downsizing
You can increase your retirement pot by moving to a smaller house or flat. In addition to the lump sum you’ll get from the sale price, you’ll save on maintenance, council tax, utility bills and more. Also consider selling any unnecessary assets such as a holiday home you hardly use or a second car.
- Reap the rewards
When retirement day finally arrives, it’s time to bask in the benefits of a lifetime of sensible financial planning. Continue to have regular meetings with your financial adviser and be prepared to make adjustments but most of all, enjoy yourself – you’ve earned it!
This article is for general use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be or constitute advice. The value of your investments can go down as well as up, so you could get back less than you invested.
GreenSky Wealth Limited is authorised and regulated by the Financial Conduct Authority. FCA No. 629624. Registered Office as above. Registered in England and Wales, Company No. 07103441. Wills and estate planning are not regulated by the Financial Conduct Authority.