Yours money editor Sarah Jagger explains what you should be doing to make life after retirement more financially comfortable.
How to plan for retirement in your 50s
When do you want to retire?
Preparation and planning are key to meeting retirement goals. Set up a spreadsheet of your spending and income now and for when you’re retired to see what you might need. There's a useful free retirement planning tool at Pensionmonster.
What is your retirement income likely to be?
Work out how much you have saved in private and workplace pension schemes and what income they’re likely to provide, not forgetting investments such as ISAs.
Find lost pensions using Gov.uk or call 0345 6002 537. Consider consolidating pension pots from your various employers into a modern pension.
Get a State Pension forecast
Check your National Insurance Contributions are up to date and how many more years of contributions you’ll need to receive a full State Pension using Gov.uk. For many of us, this alone will not provide enough, so now’s the time to top up pension contributions and maximise your employer’s contributions.
There are a number of options – tax-free lump sum, drawdown, annuity – however it’s important to understand how each can contribute to your income in the future and what the tax implications may be.
Get free guidance and advice from Pensionwise to help understand your options.
- Set retirement goals.
- Maximise pension contributions.
- Pay off debt.
- Review how your pension pot is invested
- Get a State Pension scheme forecast.
How to plan for retirement in your 60s
Now's the time to start actively planning your retirement.
Boost your State Pension by paying NICs
Boost your State Pension by paying voluntary National Insurance Contributions. One year of
voluntary NICs costs £741 and could buy you an extra 1/35th of a pension – giving you an extra £237 per year.
Boost your State Pension by deferring
State pensions are increased by 1% for every nine weeks you defer, or by 5.8% for a full year. If you’re entitled to the current full annual State Pension of £8,296.60 you’ll get an extra £479 a year. The longer you defer, the more you’ll get. Find out more at Gov.uk.
- Buy yourself more time to save by working longer.
- Supplement your pension with part-time work.
- Downsize your home or move to a lower cost area.
- Check that debts, including your mortgage, are in order.
- Create your retirement income strategy with the help of a financial adviser.
- Avoid taking too much pension income which could put you in a higher income tax bracket.
- Consider deferring.
How to plan for retirement at 70-plus
Assess your income
You’re likely to be retired, receiving a retirement income and your State Pension. If you’re still working this may be by choice or necessity. Either way you could have 20 or more years ahead of you, so make sure your income lasts and is protected against cost-of-living increases.
Investing your pension
If you opted to use ‘income drawdown’ and keep your money invested in stocks and shares while drawing an income, check your investments. Consider using some of your retirement income pot to buy a guaranteed income (annuity).
Passing on your pension
To ensure the right people benefit, complete an ‘expression of wish’ form and send it to your income drawdown provider.
Plan for the future
Consult a pension expert on the implications of long-term care find one local to you at Unbiased.
- Review retirement income strategy.
- Focus on cutting costs.
- Make a long-term care plan.
- Get inheritance and estate-planning advice.
For more help with your retirement planning go to Yours Retirement Services