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Stepping up your retirement planning: Your checklist guide

At a time in your life when you’re at your most productive and able to set more money aside, it’s prudent to start thinking more about your retirement plans and pension provision. But many Brits don’t realise the shortfall between their actual savings and the cost of their ideal retirement. 

According to our latest research, an average saver over the age of 50 in the UK has around £218,000 in their pension pot. However, the same savers’ ideal retirements would cost an average of £373,000, highlighting the importance of maximising contributions wherever possible with the assistance of effective financial planning.

That’s why we’ve put together a handy checklist guide for savers who aren’t ready to retire just yet but want to ensure they have the proper provisions in place so they can enjoy the retirement they deserve. If this sounds like you, our must-read guide is designed to help you get the most from your savings to secure your financial future.   

Take stock of your situation and review your goals

As you enter the 40-55 age range, it’s essential to take stock of your financial situation and start planning your retirement goals, both financially and in terms of your ideal lifestyle. Consider factors like your current savings, debts, and any changes in your income or expenses. This assessment helps you understand where you stand and whether you’re on track to meet your retirement objectives.

Calculate your post-retirement needs 

With retirement approaching, it’s crucial to have a more accurate estimate of your retirement income needs. Consider the lifestyle you envision during retirement and the expenses associated with it. Factor in potential healthcare costs and inflation. This assessment will help you determine if you need to adjust your savings rate or investment strategy.

“If you want to have a gross retirement income of £25k p/a, no state pension income, you’ll need a pension pot worth a minimum of £500k.

.The logic is that it’s reasonable to expect an average annualised return of around 5% from a balanced and diversified portfolio over the long term. If you generally withdraw less than the average rate of growth, it’s reasonable to assume that your pot should rise nicely through time.”

Please be aware that projections are never a perfect predictor of future performance, and are intended as an aid to decision-making, not as a guarantee.

Assess and adjust your investment strategy

As you get closer to retirement, it’s wise to reassess your investment strategy and whether it’s right for you. Typically, you may want to start shifting towards a more conservative portfolio with a lower risk profile to protect your accumulated savings from market volatility. Balancing risk and potential returns becomes increasingly important at this stage.

Catch-up contributions

In the UK, you’re able to make up any missed contribution years to your state pension by up to six of the previous tax years. 

Additionally, if you have already maximised your pension allowance for the current tax year, then you can use carry forward to your advantage. This is where you can fund your SIPP with any unused pension allowance from the previous three tax years. It’s always best to seek professional guidance to ascertain the correct value to contribute, however.

Your beneficiaries and estate planning

Review and update your beneficiaries for your pension accounts and other financial assets. This ensures that your savings are distributed according to your wishes in case of your passing. As the SIPP sits outside your estate, it carries with it significant opportunities to minimise your inheritance tax liability when your overall estate is passed onto your loved ones. Setting up trusts or other legal arrangements can also be beneficial in preserving your legacy.

Ready to get started? Here’s how we can help

Remember that the years leading up to retirement are crucial for fine-tuning your financial plan. Engaging with an investment consultant can be particularly helpful during this stage, as they can provide personalised guidance based on your specific circumstances and goals. Regularly reviewing your progress and making necessary adjustments will help ensure a smoother transition into retirement.

You should also ensure you’re familiar with all the pension and tax changes this year in the Chancellor’s Spring Budget and Mansion House speech. We detail them, and what they could mean for you, here.

To get in touch with a member of our team, you can book an appointment online here, or simply give us a call today. 

As with all investing, your capital is at risk. The value of your portfolio with Moneyfarm can go down as well as up and you may get back less than you invest. A pension may not be right for everyone. Tax treatment depends on your individual circumstances and may be subject to change in the future. If you are unsure if a pension is right for you, please seek financial advice.


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*Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.