If you have not drawn up a financial timetable as you approach retirement, then it’s never too late to start.
To help with some of the key questions you need to answer as retirement approaches, here are some points to consider and hints of when to make the decisions.
The first milestone is around a decade before retiring.
At this stage, most retirement savers need to sit down with a pencil, paper and calculator to evaluate their savings plan and financial goals.
If everything’s on track, then fine. If not, get a pension forecast, tot up your savings and think seriously about how much extra money you either need or can afford to save over the next 10 years.
Stopping spending to save
Some savers even have to cut out some spending while they are still earning to make sure they have enough money for their later years.
The next milestone is around three to five years before retirement.
Maximising retirement income is the objective. Look at what savings you may have, even if it doesn’t seem a lot and consider consolidating small pot pensions or shifting cash into ISAs or high interest accounts.
Checking your state pension contributions to make sure you have accrued enough qualifying years for a full pension is vital – the target for the new flat rate pension coming in from April 2016 is 35 years.
Don’t forget pensions and savings are not the only investments. If you have property to let or stocks and shares, these can provide a retirement income as well.
Retirement is almost within touching distance now – about six months away.
At this time, it’s crucial to make sure you are ready for retirement by looking at your likely income and expenses – especially any loans, credit cards or mortgages.
Don’t forget your health. If you are ill or suffering certain conditions, an enhanced annuity will pay up to 40% more than a standard contract.
If you have to work on to bulk up your savings, if you are past retirement age you can stop paying national insurance and put the money into savings instead.
You will have the chance of taking 25% of your pension as a tax-free payment, but before grabbing the cash and booking a trip around the world, think carefully if that money will be better off left alone or reinvested.