For many people, retirement represents more than just the end of a career; it’s the beginning of a new chapter filled with possibilities and the opportunity to fulfil some of your lifelong dreams.
Whether your retirement date is fast approaching or is still some time away, it’s a good idea to regularly check in on your plans to ensure you’re heading in the right direction.
Taking time now to evaluate your progress can help you make any necessary course corrections, so you can move towards the retirement you deserve.
Read on to discover six steps that can help keep you on track to achieve your retirement dreams.
1. Define what retirement means to you
Before you can plan for retirement, you need to know what it is you’re planning for. So, it’s a good idea to create goals based on your ideals and then break those goals down into measurable targets.
To help with this, you might want to ask yourself:
- When do you want to retire or start phasing out of full-time work?
- Where do you want to live when you retire?
- What trips and experiences will you need to save for?
- Are there any family members or loved ones you want to support with housing, education, or other significant costs?
- Are there any charities or causes you want to support?
- What hobbies, volunteering, or side projects do you want to pursue?
Once you’ve defined this vision, you’ll have a clearer idea of what your dream retirement looks like. You can then factor in other costs, such as everyday expenses and social care, and make informed estimates of how much you’ll need to cover your lifestyle.
A financial planner can help you refine these estimates and factor in unknown elements like inflation, life expectancy, and market fluctuations to get a range of figures that give you an accurate idea of where to aim for.
2. Check in with your State Pension
While the State Pension is unlikely to cover all your retirement expenses, it can still form a valuable foundation for your income.
To qualify for the full amount, you typically need 35 years of National Insurance contributions (NICs). Fewer than 35 years may reduce your entitlement, and fewer than 10 years could leave you ineligible altogether.
To see where you stand, visit the UK government’s online portal to check your NICs record. If there are gaps, you can usually make voluntary contributions dating back six tax years.
A financial planner can help you calculate your expected entitlement and assess whether topping up your contributions is worthwhile, all within the context of your broader retirement strategy.
They can also help you determine other elements of your State Pension, such as whether to defer it if you’re planning to work beyond the State Pension Age.
3. Review your pension pots and check their distribution
Your workplace and personal pensions will likely form the core of your retirement income, so it’s important to monitor their performance and ensure they’re moving towards your goals.
A pension review can reveal how much you’ve accumulated, project future growth, and identify any gaps or shortfalls. It’s also a chance to check that your investment strategy is still suited to your circumstances.
For example, many workplace pension schemes will keep your pot in a default fund that will gradually shift to lower risk investments as you near retirement. However, once you have a sizeable pot, this may not be best suited to your long-term goals.
Conducting a review can help you balance your risk level and diversification with your timeline and retirement goals. A financial planner can help you perform a full assessment of your pensions and make any adjustments that could lead to stronger or more stable returns in the long term.
4. Make the most of other income sources
As well as your pension and State Pension, additional income streams can offer more flexibility and support in retirement. These might include:
- Investment income or dividends
- Earnings from rental properties
- Tax-efficient savings accounts, such as ISAs.
Diversifying your income sources can help spread risk, giving you a buttress of support if your pension income is inadequate, perhaps due to inflation.
A financial planner can help you utilise your existing portfolio and make further investments that could help support your future income needs.
5. Revisit and tweak your plan over time
Retirement planning isn’t a one-time exercise, and your dreams will be best served if you perform regular check-ins and make necessary adjustments along the way.
If your life changes, your goals may shift, and your financial strategy should evolve too. For example, you may welcome a new child or grandchild into the family, which could change the course of your plans completely.
Moreover, after conducting a check-in, you might find that you’re ahead of schedule, and you can retire earlier than you initially planned.
Or, if you’re behind where you need to be, even small changes can have a big effect over time. You may be able to get back on track by only slightly increasing your pension contributions, adjusting your investment approach, or working for just a year or so longer than you planned.
6. Speak to a financial planner
With the right guidance, you can make sure you are on course to achieve the retirement you’ve always dreamed of.
A financial planner can help you clarify your goals, create a plan to reach them, and then ensure you stay on track as you progress through life.
To speak to a financial planner, get in touch.
Email us at hello@vwmwealth.com or call us on 0141 229 4004.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
