Maybe you’re reading this nearing retirement age – then again, you might be glancing through in your 20s or 30s.

Either way, now is the right time to think about retirement.

When you reach retirement age, you deserve to be able to relax about your money situation – but that’s not going to happen by accident. If you want to make sure your money matters are in order – follow these 8 steps…

  1. Work out your retirement income

If you’re going to start looking at what life looks like post-retirement you’re going to need to know exactly what’s going to be hitting your account each week or month.

Start by getting some pension statements – including a government pension statement. This will give you an idea of how your state pension looks – and includes a breakdown of all your national insurance contributions to date.

Effectively, working out your retirement income is a little like drawing up a projected budget – think about income, outgoings and what’ll be left – before weighing up whether that’s going to allow for the lifestyle you want.

  1. Get your pensions in order

This might seem like an obvious step but there’s sometimes a little more to getting your pensions in order than you might realise.

People often lose track of their pensions – especially in the modern world of changing workplaces and fluid career paths. If you think this might be the case, you can use a pension tracing service to get the full picture.

Be careful though, you don’t have to pay to track you pensions down – while there are some good paid services out there, there’s also a free alternative Pension Tracing Service provided by the government.

  1. Clear your debt

If it’s at all possible, starting retirement with no significant debt is a massive step in the direction of financial freedom.

The chances are, the ‘incomings’ part of the budget you’ve put together is going to be lower post-retirement than it was when you were in work, so debt will make up a greater percentage of your financial picture if it sticks around.

Get a full picture of everything you owe – then, look at the interest rates you’re paying on each amount. While it’s important you continue to pay your repayments, it’s beneficial to prioritise debts with the biggest interest rate first. For more in-depth advice, look over the advice on How to Get Out of Debt Fast in 2017 (New Edition).

There’s a chance that taking a lump-sum from your pension might go a long way toward paying your debts – if not clearing them totally. While it’s tempting to do so – ensure you seek professional advice before making a solid decision. While the lump sum and no debt might be tempting, you might be worse off in the long run.

  1. Look at what you might be entitled to

Upon reaching retirement age it’s worth talking to the department of work and pensions to see if there’s any additional support you might be entitled to.

It’s not a certainty that your situation will mean you qualify – but if your income drops below a certain level, you’re struggling with your health or you’re supporting someone else who struggles with their health – you might be able to access support.

  1. Make a will

If you’re looking at overhauling your finances on the approach to retirement, it’s well worth making sure your will is in keeping with the changes.

Assumptions about your estate can lead to be problems when your will is read, so clarity at this stage is absolutely vital. Even assumptions that are correct can pan out a lot more smoothly when an accurate will is in place – reducing stress at an already difficult time for your family.

  1. Don’t take any risks with your savings

As you approach retirement, the dwindling amount of time you have before you start to access your pension provisions means it’s often a good idea to reduce any risk that’s associated with the money that’s being put aside.

Look into the type of pensions you have – personal pensions, stakeholder pensions or a workplace pension are all likely to have some kind of investment behind them – and investments are not a ‘sure thing’.

You’ll find that some pensions automatically reduce the risk that bolsters their return as retirement age approaches – but not all do this, so it’s worth checking if you’re not certain.

Ideally, this is a step to take between 10-12 years prior to retirement age – and it is often a good time to be taking professional pension advice at the same time.

  1. Budget for retired life

Now, you might think that we’ve already covered ‘budgeting’ – but this is a little different and more lifestyle based – rather than numbers based!

Generally speaking, it costs more money to be retired than it does to maintain life while you’re working. There’s a variety of reasons for this – it might be driven by your desire to take up new hobbies or pass times, or maybe your decision to engage in a slightly more leisurely lifestyle – with more holidays and days out.

Either way, projecting some costs is important. It might sound like it’ll take the joy out of your plans, but actually, a little financial discipline can equal a lot of leisure freedom.

  1. Think about work

Think about work they say! As if you haven’t been doing enough thinking about work for the years leading up to your planned retirement!

Retirement means different things to different people. Perhaps it for you it means endless days in the garden or on the golf course – but that’s not for everyone. For a lot of people it’s just about a change in pace – and taking low pressure part time work often ticks that box nicely – while maintaining some level of income.

There’s might not be any pressure to work when you’re retired, but if finances would be more comfortable with a little bit of extra income, then it’s certainly an option that’s worth exploring.

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