When you think of retirement planning, you might think you can put it off until just before the milestone approaches. But it’s a process that should start far sooner than that. Taking stock of what you want and whether you’re in a position to achieve this in your 40s and 50s can ensure you’re on track.

Why take a mid-life MOT?

Retirement might seem like a long way off. However, evaluating what you want from the next chapter of your life now can help put you in a position of control. You probably already have some idea of what you want your retirement to look like, whether relaxing or adventure is your focus. But thinking about the specific plans and how you’ll afford it are essential for turning those aspirations into a reality.

When you think about retirement planning, is it the finances that spring to mind? It’s about far more than just money. The government’s site sets out three core areas to consider during your 40s and 50s to plan for your future:

  • Money: Of course, money is an important part of your retirement plan. After all, you’ll still have financial responsibilities and it’s often key to achieving your aims. Understanding how your finances will support you throughout retirement is important.
  • Job: In the past, it was common to give up work entirely on a set date. However, a more recent trend means retirees are increasingly working in some form or going back to work at certain points. As a result, you need to think about when you want to give up work and whether adjustments may need to be made in the future.
  • Health and wellbeing: Your overall health and wellbeing should be at the centre of your retirement plan. It will have an impact on what’s possible and taking care of your health should be considered a priority.

Your mid-life MOT

So, with those three areas in mind, what should you be doing now to get your retirement on track? There are nine key things to start thinking about now.

1. Check the income pensions are projected to deliver: Your retirement provisions will play a key role in the lifestyle you can achieve. As a result, the first step should be to check you’re on track. This should include looking at the projected income the State Pension, Personal Pensions and Workplace Pensions are set to provide at retirement age. If there’s a shortfall, it’ll be far easier to make it up now than if you were to wait until retirement.

2. Assess other assets: Pensions often take centre stage when it comes to retirement planning, but other assets can provide an income too. If you’re investing or saving with your long-term future in mind, it’s worth checking how these assets are performing too. Are you getting the most out of your efforts, for example? Holding savings in a cash account could mean you lose out on potential growth opportunities, for instance.

3. Set retirement priorities: Equally as important as the financial side, is understanding what you want from retirement. Spending some time thinking about the lifestyle you hope to achieve and priorities can put in you on the right track. For some, retirement might be about relaxing, for others, new adventures will be more appealing. Retirement is often a chance to create a lifestyle that suits you as you enjoy having more free time.

4. Link goals with your finances: Of course, the above three points need to link together. Are your priorities and hopes for retirement realistic with your financial provisions? Comparing these two aspects of retirement planning now puts you in a position to take control. If there’s a gap, for example, you can either choose to adjust your expectations or increase contributions.

5. Build a career plan: You don’t have to set a retirement date in stone, but having an idea about when and how you’d like to retire can help ensure your provisions match this. It’s becoming increasingly common for retirees to opt for a transitional approach to giving up work, slowly easing into retirement, rather than giving up working in one go. Is this an approach that would appeal to you?

6. Look at working options: It’s also important to look at how your job will suit priorities and abilities as you get older. You might want to cut back on working hours, work from home or try something new entirely as your approach retirement. Workplaces are more flexible than ever and it’s worth exploring what your options would be.

7. Create a plan for ill health: No one wants to think about becoming ill. However, it should be included in your financial plan. It helps you create a financial safety net should you become too ill to work or need care services in retirement. If ill-health meant you had to retire a few years earlier than expected, would it stretch your savings, for example?

8. Consider the impact of supporting loved ones: Like the point above, you can’t predict what will happen in the future with your loved ones. Whether your partner requires additional care, or you want to give grandchildren a helping hand, looking at how additional, unexpected expenses could have an impact can lead to a more robust plan.

9. Seek advice: Planning your retirement can be challenging, including understanding how long your savings will last for with your aspirations in mind. Seeking advice here can help. It’s a step that can give you confidence in the plans you’re making and fully realise if any changes need to be made to achieve goals.

The sooner you start thinking about retirement, the more likely you are to achieve your aims. If you’re currently in your 40s and 50s and want to discuss your retirement goals, please contact us.

Please note: A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstance, tax legislation and regulation which are subject to change in the future.