Your Retirement Financial Planning Checklist

Financial planning for retirement is a daunting task seemingly governed by many unknowns, so breaking the task down into small chunks can make the job a lot easier.

So many assumptions have to be considered – like how long will you live and whether you will need to cover the cost of long term care.

To help, here’s a pre-retirement check list to help put you on the right tracks for a more comfortable and affordable life after work.

Setting the date

Everyone has a different date in mind for retirement, but think about setting a target. This peg will help set a mark for working out how many years you may have to finance out of your retirement savings.

Sometimes health issues or those of a partner may trigger retirement for you. Don’t forget the longer you can carry on working, the more savings you can amass to help out in later years.

Run a rule over your finances

Many financial advisers reckon the two-thirds rule is the best way to calculate how much retirement income you need – this is worked out as two thirds of you final salary. Not all this has to come from savings and investments.

Remember, your cash needs will drop away as you age, but you may have to make some provision for long-term care if you live to a ripe old age or suffer from illness.

Check out alternative income sources

Besides a return from any pension, savings or investments, you will also pick up a state pension and possibly other benefits, for instance, if you are a carer.

Research your entitlement and set that money off against the total amount the two-thirds rule suggests you need.

Look at investing retirement savings

Keep some money as cash, but look at your other options. Annuities are still on the market, but considered poor-return investments for healthy retirees. Those with health issues may find the returns better.

Other options include ISAs and riskier investments like buy to let property.

Work to a budget

Keep track of your spending and make a cash flow forecast. Divide your total assets by your annual spending to arrive at a withdrawal rate. This should highlight how long your cash, pension and any other investments will last.

If the figure is disappointingly short and you have your health, think about deferring your state pension, if you can, and working on. Don’t forget to factor in repaying any debts.

Make a will

Write a will and plan how you intend to dispose of your estate on your death taking tax into consideration


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