5 financial priorities before you retire

Preparing to leave the world of work behind can be exciting. You will probably have dealt with the major expenses of life – a home and bringing up a family – and be ready to enjoy spending time in the way you want

That life of leisure could start at just 56 if you wish – but only if you have sufficient funds, and have planned ahead carefully. Making the most of your golden years can be a great deal easier if you have dealt with a few key financial priorities first.

Priority 1 – maximise the money in your pension pot and investments

Your investments will dictate just how much wealth you can call on in retirement.

Your pension may be your most rewarding investment of all. It can be very tax efficient – putting £10 in your pension pot costs just £8 if you are a basic rate taxpayer, and astonishingly just £6 if you are a higher rate payer.

In the current tax year you can put in £40,000 or your entire annual income into your pension – whichever is the lower – and the maximum Lifetime Allowance is £1,073,100 in the 2022/23 tax year – frozen at this level until the 2025/26 tax year.

So it might make sense to put as much as possible into your pension in your last years of work. In some cases, you might even look at selling up some other investments to take advantage of the government’s generosity.

  • Check your pension fund performance.  
  • Look at your company pension scheme, and think about using a personal pension to work alongside it.
  • Check your other investments – you may wish to cash them in – or remain invested to enjoy the potential of further growth.

Priority 2 – plan how you will take your pension

How you use your pension pot will make a big difference to the lifestyle you can afford. An annuity might guarantee an income for the rest of your life – while drawdown could offer the potential for continued growth of your pension pot.

  • Get an expert to help you look at the ways to access your pension pot.

Priority 3 – plan your post-retirement spending

Most of us expect to spend less when we retire. By looking at how we spend now we may be able to see ways to cut our expenses. 

Drawing up a budget will help you plan ahead. Do you want to downsize, perhaps move from a home that has grown too large to an idyllic country retreat or to be closer to family?

Have you dealt with debt? If you have to dip into your pension pot to take care of expenses you have made in the past, there will be less cash available for your future.

  • Start drawing up a post-retirement budget – and seek help from an expert to identify the hidden costs, and where you might economise.

Priority 4 – think about the future

If you have not already done so, making a will is an essential part of preparing for retirement. Properly written, it can make sure that if anything happened to you, it is your loved ones who would receive your wealth – not the taxman.

  • Get some advice on tax-efficient ways to pass on wealth.

Priority 5 – getting some expert help

Money management is easier with an expert at every stage of life. Making the most of your retirement could start with a call to a Continuum expert now.

We can help you make the most of your pension pot and your investments, and help you prepare to make the next stage of your life as prosperous, rewarding  – and enjoyable – as possible.

Simply contact us at Continuum for the financial planning you need.

Call 0345 643 0770, email us at [email protected] or click on the ‘Contact Us’ link below. 

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The value of an investment and income from it is not guaranteed. When investing your capital is at risk.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.

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