As the new decade starts to build up steam, many people will be thinking about their finances, work prospects and plans for retirement.
There’s a lot to consider about giving up work – from whether to stop completely or to keep a hand in by going part-time.
If you are thinking about retirement, here are some tips about pensions and money.
- Think total income and not just pensions – there are many other sources of income, like interest from savings, dividends on investments and rent from buy to let housing
- Draw up a spending forecast and budget – include day-to-day spending and the extra you might need for hobbies and holidays, for instance
- Consider how to access your cash – Spend uninvested money first so you don’t lose capital growth and plan your pension withdrawals to minimise the tax you pay
- Shop around for advice – Consider independent advice and check the market before committing to a provider
- Watch your tax limits – Try to stay a basic rate taxpayer by staying within your allowances – for 2019-20, the nil rate tax band is £12,500 and an additional £37,500 at 20%, making £50,000 before higher rate (40%) tax is charged
- Be realistic about your finances – Most people live longer than they expect, which means they need more money. Build a Plan B into your spending forecast and budget
- Keep your paperwork up-to-date – Review your will and related documents to make sure everything is as you wish
- Do take financial advice – Recent research shows retirement savers taking professional financial advice fared better than DIY investors.
- Beware the sharks – Scammers and fraudsters are after your cash and will steal the lot if they have a chance, so be careful who you deal with and don’t take risks with your money
- Don’t panic about money – Playing the financial game to maximise cash and minimise tax is OK, but in the end relax and make the decisions that you are comfortable with and above all, enjoy your retirement
If you decide to take financial advice, by all means discuss your plans with your friends or relatives, but don’t make any decisions until you have spoken to a regulated professional who you can trust and against who you have some comeback if your plans go wrong.