Top pension tips if you're about to retire
Why is it important to seek pension advice as you near retirement?
Pensions can be complex and as you get closer to retirement, you will need to get top pension advice to ensure you can make the best decisions for your individual circumstances and objectives. You should seek retirement advice that covers:
Taking stock of all your pension pots
What type of pensions do you have?
Do you have more than one pension pot? If so, where are they?
When and how can you access the funds in your pension pots?
What is the value of your pension pots? What benefits will they provide?
What about other options or guarantees?
If you have lost track of any pension pots, visit the Unclaimed Assets Register website at https://www.uar.co.uk/Customer/Home to check.
If any of your pension pots are not being professionally managed, you should find out where the funds are invested, consider how that fits in with your financial objectives, understand how they are performing and what charges you are paying.
If you need help, our independent wealth planners can give you retirement advice that will provide a clearer picture by reviewing all your pension pots and recommending ways to manage them going forward.
What should you consider if you are approaching your pension lifetime allowance?
If you're close to retirement, you may find you are approaching the pension lifetime allowance (LTA) limit. Our expert wealth planners will provide retirement advice that considers if you are saving too much which means there could be a tax charge on the amount in your pension over the lifetime allowance. You may need to consider applying for protection. Top pension advice should also factor this into your pension drawdown options, as the tax you will have to pay on this excess amount depends on how it is withdrawn.
If you think you are nearing the lifetime allowance, please read what our experts have to say here for more information and seek expert retirement advice to see if there may be other, more tax efficient ways for you to continue saving for retirement.
As well as the lifetime allowance, our retirement advice will also take account of all your circumstances including your health, overall finances and family circumstances, to consider your full range of options.
Forecasting your cash flow requirements in retirement
As you get closer to retirement, it is important to assess your current and forecasted wealth, along with your income and expenditure, to build a picture of your finances now and in the future.
Lifetime cash flow modelling can help ensure you don't run out of money – or die with too much – by showing whether your current investment approach is either excessively risky or unduly cautious.
Retirement advice can also help you consider:
Your income needs at different stages in retirement – you might well want more income earlier on
Tax implications – pensions are generally highly tax efficient, so it may be preferable for you to draw your pension later and use other investments for income in the meantime
How much you want to leave your beneficiaries
Whether or not you need a cash lump sum.
When we provide retirement advice, we can undertake a cash flow forecast as it’s important to know if you will run out of money. For more information, please read this article.
Your pension drawdown options
When providing retirement advice, we will consider the different options available to drawdown your pension benefits, as different types of pension schemes have different drawdown options.
You should also be aware of how your pension benefits might be taxed during your lifetime, what funds might remain on death and how these might also be taxed.
These are the usual choices:
Leave your pension pot untouched
Get a guaranteed income (annuity)
Get an adjustable income
Take cash in chunks
Take your whole pot
Mix your options.
If you want more information about the different pension drawdown options, watch this video for top pension advice from our expert wealth planners. As this is a complex area with many different options and tax implications, we would recommend you seek professional retirement advice. If you would like to speak to one of our wealth planners, you can request a free consultation here.
More top pension advice
While we would always recommend seeking professional retirement advice, if you would like to undertake your own pension review, you may find the following helpful:
Get a state pension forecast at https://www.gov.uk/check-state-pension
Various bodies can help (e.g. the Pension Wise website, The Pension Advisory Service, the Money Advice Service and perhaps your employer’s pension department) but there's no substitute for bespoke advice
Beware of scams – there is increasing concern around inappropriate transfers of pension funds, and HM Treasury has launched a consultation in this area
Considering further pension funding before you retire? Check your annual allowance, as it's not the same for everyone
Who gets any remaining funds when you die, and how can they draw them? The Pension Freedom changes in 2015 mean that, in certain cases, it would be sensible to update your instructions.
Seek expert retirement advice
We believe high income earners and wealthy individuals should seek professional advice on their pension, with regular reviews, as it is a complex matter. At Canaccord Genuity Wealth Management, we offer retirement advice via our independent wealth planners.
If this article has interested you and you would like to meet with one of our wealth planners or have any questions, please get in touch for more information on +44 02 7523 4500 or book a free consultation.
Would you like us to carry out a retirement plan review with you?
Alternatively, read more:
- How to boost your pension by making use of unused tax allowances
- Will I run out of money? How does cash flow modelling work?
- Baroness Ros Altmann explores the future of retirement (video)
- Make the most of your retirement (PDF)
- Post COVID-19 Wealth Planning Guides
- How can tax planning ensure you make best use of your pension annual allowance?
- Retirement planning
- Inheritance tax services
Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.
The information provided is not to be treated as specific advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity.
The tax treatment of all investments depends upon individual circumstances and the levels and basis of taxation may change in the future. Investors should discuss their financial arrangements with their own tax adviser before investing.
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Investment involves risk and you may not get back what you invest. It’s not suitable for everyone.
Investment involves risk and is not suitable for everyone.