It is always a really good idea to get ready as retirement is close. Specialists recommend that around 2 years before retirement you take the needed steps to actually get ready. Remember that there are different options available for you. There are many things you can do before you retire that will help. Obviously, you can go online and read a pension guide UK but for most people that do not have the needed time to conduct the appropriate research it is better to just work with a financial adviser. No matter what you choose to do, here are some things you want to remember.
Calculate Likely Retirement Income
You want to be sure you know how much money you can expect to get as retirement comes. Calculating 2 years before retiring helps because you have the needed time to do it properly. The only problem is that it does take time to properly calculate your likely retirement income. Try to get state pension statements, see how much defined benefit pension is available and factor in all the investments and savings you managed to gather till that point. Trace lost pensions and you end up calculating a rough estimate. Is this enough for you or do you need more? This is an important question to ask and have an answer to.
Do Not Risk Pension Savings
When you have a workplace pension, stakeholder pension or personal pension, money is invested in some funds. As retirement gets closer you want to start taking out the money from the higher risk investments and move them towards investments that are low risk. Generally, this is something you want to start doing when there are around 10 years left till retirement. Financial advice about the very best option available in your case is normally necessary so you can identify the safe low risk investment opportunities available for you.
When getting close to retirement and you see that you will most likely get less than you need, it is time to do all that is needed to boost pension pots. This is normally limited but there are things that can be done. Generally, there are two main options available:
- Pay more for the pension
- Put back repayment date and continue working for a few more years
Consider both of these options. What is normally very important is to have a monthly amount available for you that is good for the expenses you have. When this is not the case, problems appear. Do the math and calculate the amounts as accurately as you can.
Before you retire you do want to clear all the debts you have. Starting retirement as debt free as possible should be a main goal for you. The income is going to go down as you retire so the fixed repayments will put more strain no you than now. Do add up all that you owe, check all the interest rates and whenever possible, pay off some of the debt. Start with the debt that has the highest interest rate as this makes repayment more efficient.