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How to take care of your finances ready for retirement
Retirement can feel like a major milestone – and there’s plenty to think about before you get there.
By your late fifties to early sixties, retirement may well be sitting front of mind – namely, when you want to retire, how you’ll support yourself financially and what you want your wealth to make possible in later life. It can be an exciting stage, but it can also bring important decisions around pensions, investments, tax, income and legacy planning.
This article is the final part of our series exploring how to take care of your finances through life’s different stages. Here, we’ll focus on preparing finances for retirement: understanding what income you may need, reviewing the pensions and investments you’ve built up, and thinking carefully about the legacy you may want to leave behind.
Here’s how to take care of your finances as you prepare for retirement.
1. Understand your retirement income
It’s important to understand what your retirement income will be as far enough in advance as possible (and to keep reviewing this regularly). This means you’ll have more opportunities to make changes and ensure it will be enough to take care of you in the long run.
As a starting point, the Attivo Pension Calculator is a helpful tool for assessing whether you are ahead of target, on target, or behind target for your retirement plans. Of course, this is just an example, and a qualified Financial Planner will be able to help you explore this in more detail.
How does your pension compare to other people’s?
Our article compares typical UK pension pots by age, and shows what your savings could mean for your retirement income.
This article is provided for information purposes only and does not constitute a personal recommendation.
2. Review your pensions and investments
Structuring your pensions and investments is essential to their success. Start by reviewing the pensions you currently have and check how they are performing, and whether any changes need to be made now to boost your retirement income. You could also look into whether you may have a lost pension, and if so, how to track it down.
Regular reviews of your investments are also advisable, particularly if there are any fluctuations in market performance. Turning investments into reliable retirement income is not always straightforward, however, which is where a qualified financial planner can provide effective support.
3. Plan for your legacy
Long-term, careful planning can mean your finances not only take better care of you in retirement, but also your loved ones – even when you’re no longer here. In short, effective estate planning can secure your legacy for the next generation, helping you reduce tax where possible and supporting your beneficiaries.
This has become more important than ever as we approach 6 April 2027, when most unused pensions and death benefits will be included as part of a person’s estate for Inheritance Tax (IHT). As a result, more families will likely cross the tax-free threshold of £325,000, and be charged a 40% IHT bill.
Get further guidance on IHT and estate planning
Our free guide explains how effective estate planning can help reduce unnecessary tax and ensure your wealth goes to the people who matter most.
Preparing finances for retirement isn’t just about building up a pension pot.
It’s about understanding what you want this next stage of life to look like, and making sure your finances are structured to support it.
By reviewing your income, pensions, investments and legacy plans early, you can give yourself more time to make informed decisions and adapt as your circumstances change. This can help you feel clearer about the choices available to you, both now and in the years ahead.
We’re here to help
If you are preparing for retirement and would like to understand whether your financial plan is on track, Attivo can help. Our Financial Planners can work with you to review your position, explore your options and build a plan that supports the future you want to create.
Important information
We offer a free initial consultation to discuss your goals and next steps. If you decide to go ahead with advice, charges may apply – these will be explained before you commit.
This article is for general information only and does not constitute personal financial or tax advice. The suitability of any pension, investment, retirement income or estate planning option will depend on your individual circumstances.
Pension and investment values can go down as well as up, and you may get back less than you originally invested. A pension is a long-term investment, and your eventual income may depend on factors including fund performance, charges and tax legislation. Retirement income options such as drawdown can offer flexibility, but income is not guaranteed and will depend on investment performance, charges and how much you withdraw.
Pension consolidation is not right for everyone and may result in the loss of valuable benefits or guarantees. Taking income through drawdown reduces the value of your pension fund and could affect the level of income available in the future.
Tax treatment depends on individual circumstances and may change in the future. References to future tax rules are based on government announcements and current proposals and are subject to change. The FCA does not regulate inheritance tax planning services. Tax planning is not an activity regulated by the FCA.