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6 essential steps to take if you’re retiring in 2023Published: December 15, 2022 by Jennifer Armstrong
If you’re retiring in 2023, congratulations! It’s an exciting milestone that you’re no doubt looking forward to.
Here are six practical steps to take now to make sure you can retire with confidence and be financially secure.
1. Set a retirement date
One of the important first steps is deciding exactly when you want to retire.
This can help you decide when you’ll need to give notice to your employer and handle passing on responsibilities or projects to your replacement.
It can also help you create an effective timeline for when you need to complete other tasks and make sure everything is ready for your retirement.
It’s worth reviewing if you currently have valuable workplace benefits, such as life insurance or health insurance, that you’d like to maintain. It can ensure you don’t have any gaps in your retirement plan, and you can make it part of your budget from the outset.
2. Check your State Pension
While you may have other sources of income in retirement, your State Pension is important as it provides a reliable source of income for the rest of your life.
Knowing what income your State Pension will provide and when you can claim it means you can effectively plan how to use other assets. For instance, if you’re retiring before the State Pension Age, you may need to take a higher income from your personal pension initially to fill the gap.
The State Pension Age is slowly rising. It is 66 and is expected to reach 67 by 2028.
You can use the government’s State Pension forecast to check how much you could receive, when you can claim it, and how you may be able to increase your entitlement.
3. Review your pension and calculate your income needs
To ensure you’re financially secure in retirement, you need to understand how much income you need. This should cover both your essential expenses and the disposable income that will allow you to live the life you want.
With a figure in mind, you can review your pension and start to understand whether your savings will be enough.
Remember, your income needs may change throughout retirement and inflation will have an effect. You may also want to consider how other assets can be used to boost your income.
When assessing if you’ve saved enough, you’ll need to think about how long your pension and other assets will need to last. Retirement can span many decades and calculating your long-term income needs now can help ensure you are financially secure in your later years.
4. Assess your financial safety net
As many retirees aren’t earning an income, it’s important that you take steps to ensure you can weather a financial shock.
If investments experienced volatility, for example, do you have an emergency fund that you could use in the short term? Or what would happen if you needed to pay an unexpected bill?
An emergency fund can continue to add value to your financial plan in retirement. Depending on your circumstances there may be other things you can do to create a safety net too.
If you’re planning with a partner, it’s important to consider how financially secure either of you would be if the other passed away. It can be difficult to consider this but means you can take steps to create long-term security if the worst happens.
5. Book a meeting with a financial planner
As you approach retirement, you’re likely to have to make large financial decisions that could affect your income for the rest of your life. Seeking the support of a financial planner can help you understand your options and have confidence about retiring.
From your options when accessing a pension to the tax implications you may need to consider, we can help you create a retirement plan that’s right for you. It means you can focus on enjoying retirement.
If you’d like to talk to a financial planner about your retirement, you can contact us.
6. Set out what you’re looking forward to
While getting your finances in order is a vital part of retirement planning, so is preparing for the next chapter of your life.
Don’t forget to think about the things you’re looking forward to. Whether you’re hoping to spend more time with grandchildren, take up a hobby, or something entirely different, start thinking about how you want to fill your time. It can help ensure that retirement meets your expectations and is fulfilling.
Please contact us to discuss how you can balance goals with your finances.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.