Harnessing Your Financial Power – Planning Your Retirement

Lucy Young, Financial Planner at Independent Women

Retirement is a significant milestone in life, and it's essential to approach it with careful planning and consideration. Whether you're nearing retirement, at the point of retirement, or already enjoying this stage of life, understanding the steps you need to take and the considerations to keep in mind can make all the difference. This blog post will guide you through each of these stages.

Before Retiring

Before you retire, it's crucial to assess your financial situation and plan for the future

What you need to do:

• Gather statements for your pensions and investments
• Obtain a State Pension forecast
• Decide your non-negotiable expenditures
• Consider paying off any outstanding debts to reduce your financial stress during retirement
• Spend time emotionally coming to terms with retiring

Where a Financial Planner can help:

• Review your pension arrangements to ensure they will provide sufficient flexibility in retirement
• Consider the tax implications of withdrawing from your pension and explore options such as annuities or flexible access
• Evaluate your savings and investments to ensure they are structured in a tax-efficient manner. Take advantage of available allowances and reliefs to maximize your returns, particularly whilst you are working
• Demonstrate the impact paying off any outstanding debt has on your financial position using cashflow modelling

At Retirement

Reaching retirement is a time of huge change and this stage requires big decisions.

What you need to do:

• Set your retirement date
• Inform your employer
• Decide the income you would like to receive in retirement
• Plan your activities for your early retirement
• Understand who your support crew are

Where a Financial Planner can help:

• Inform you on how to withdraw your defined contribution pension funds. Options include taking a lump sum, opting for a drawdown plan or purchasing an annuity. Each option has different tax implications and benefits.
• Identify all sources of income, including state pension, workplace pensions, savings, and investments and consider how to draw on your assets tax efficiently in retirement
• Consider the potential need for long-term care and how it will be funded. Options include insurance, savings, or setting aside assets. It's essential to plan for this possibility to avoid financial strain later in life.

During Retirement

During retirement it is important to periodically review your financial situation adjustments needed so that you can continue to enjoy your retirement.

What you need to do:

• Monitor your spending and if needed, adjust your budget
• Stay active and engaged in your finances
• Maintain your social connections
• Pursue your hobbies

Where a Financial Planner can help:

• Review the sustainability of your longer term financial plan, and whether any adjustments to spending are needed to prevent any shortfalls later in life.
• Review your investment strategy regularly to ensure it aligns with your risk tolerance and financial goals.
• Stay informed about changes in tax legislation and adjust your financial plans accordingly, regularly reviewing your tax situation to take advantage of any new allowances or reliefs.

Planning for retirement is not just about ensuring your finances are in order – it is also about providing peace of mind for yourself and your family. By making the right choices, you can protect your assets, minimize tax liabilities, and ensure that your retirement years are enjoyable, comfortable and secure.

Independent Women is a trading name of Forvis Mazars Financial Planning Ltd. The information contained in this article does not constitute individual advice. Forvis Mazars Financial Planning Ltd will not accept any responsibility for decisions taken or not taken on the basis of the information presented. Always obtain independent, professional advice relevant to your own circumstances.

Any reference to legislation and tax is based on Forvis Mazars Financial Planning Ltd’s understanding of United Kingdom law and HM Revenue & Customs practice at the date of production. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.

Forvis Mazars Financial Planning Limited Forvis Mazars Financial Planning Ltd is registered in England and Wales No 3172233 with its registered office at 30 Old Bailey, London EC4M 7AU. Forvis Mazars Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. Forvis Mazars Financial Planning Ltd is a wholly owned subsidiary of Forvis Mazars LLP, the UK firm of Forvis Mazars Global, a leading global professional services network.