Getting ready for your retirement journey – 5 steps to aid this process

You may have a clear plan of when you will retire and a vision of how retirement will be for you, however it’s very important to ensure that any plans are viable and everything is in place to make it happen. Here we guide you through some of the basic steps you need to think about and prepare so you are ready for your retirement in the best way possible.   

Step 1 – Choose your pension investment

Your first step in planning for your retirement is ensuring you are saving as best you can for it. Pensions have a number of important advantages that will make your savings grow more rapidly than might otherwise be the case.

A pension is simply a method of saving for retirement where the Government offers certain tax advantages to try and encourage individuals and companies to make provision for retirement. The earlier you start to save for retirement the better, as it means your money is invested for longer and therefore has more time to grow.

There are various types of pensions, what is accessible to you may vary depending on whether you are self-employed, employed and who your employer is.

You need to carefully consider the pension fund that will best suit your needs and hopes for your retirement. Some schemes are more high risk than others but could yield a greater return and some let you access your money earlier than others which may be important to you.

Step 2 – Review your pension choices

It is a good practice to regularly review your personal circumstances looking at your time to retirement, your attitude to investment risk, taking into consideration any existing private or company schemes already held and implement the best strategy for you.

You may find later down the line your retirement plans change and the pension you chose is no longer your best option. You may change jobs and have access to a different pension scheme. We advise regularly reviewing your pension and anticipated retirement needs to ensure you are always getting the best.

Step 3 – Ensure you know your retirement options

There are now six options available to an individual wishing to take retirement benefits and these include:

• Leaving the pension pot untouched – there is no requirement to take benefits just because you have reached your ‘nominated retirement age’.
• Purchase an annuity– an annuity is an income paid to you for the rest of your life in exchange for your pension fund. The amount of income paid to you will depend upon annuity rates applicable at the time you choose to take your benefits, the options that you choose to include and health issues.
• Flexi Access Drawdown –from 6 April 2015, retirement income limits were removed for money purchase pensions, so members of pension age will be able to take what they want from their money purchase pension pot, when they want it. There will be no minimum income requirement to access this flexibility.
• Uncrystallised Funds Pension Lump Sum –this is where you can take a single or series of lump sums from your un-crystallised funds, without having to designate them for drawdown first. In this scenario 25% of each payment is tax-free and the remainder is taxed as income.
• Fully cashing-in your pension pot– there are certain things that will need to be considered prior to doing this, for example, how much tax will have to be paid on the amount withdrawn and also what provision do you have in place to support yourself in retirement.
• Mix your options– you do not have to choose just one of the above options, you can mix them over time to suit your changing requirements in retirement.

Step 4 – Seek Advice

If you are unsure how to set up your pension and what is best for you, we would recommend seeking advice from an independent financial advisor. Gilbert Stephens’ Independent Financial Advisers will assess your personal circumstances – looking at your time to retirement, your attitude to investment risk, taking into consideration any existing private or company schemes already held – to enable them to implement a strategy. This strategy will be reviewed on an ongoing basis, to help you reach and achieve your retirement goals.

Step 5 – Happy Retirement

With good advice and the right strategy, you will be well on your way to a comfortable retirement; it is then time to enjoy it and reap the rewards of having planned for the future and enjoy a long, happy and financially secure retirement.

If you would like advice on planning for the future, you can contact our financial services team on 01392 346464 or e-mail