From 10 years away to one left to go: How to prepare for retirement

Retirement planning is critical to financial security in later life.

There are many considerations over years of preparation that go into ensuring a plan, once made, can work effectively for the long term.

This guide is here to help you consider the essential steps and aspects of retirement, whether you’re 10 years, five years, or one year away.

In the UK, a moderate retirement requires around £31,700 a year for a comfortable lifestyle, according to updated figures from the Pensions and Lifetime Savings Association (PLSA).

This provides a benchmark to consider when estimating how much you’ll need in retirement and how to get there.

It’s also worth noting that while many view retirement as a countdown, traditional retirement isn’t the only path. Many now choose a more blended approach.

In practical terms, this can mean taking on less work to spend more time with grandchildren or pursuing leisure activities, without fully putting your feet up.

Also key to this process is understanding how a financial planner can help at every stage, and what you need to know to ensure your plans succeed.

10 Years to go – building on the foundations

With a decade until retirement, now is the time to evaluate whether you’re growing your savings and maximising your earnings appropriately.

Start by contributing more to your workplace or private pension, especially after a pay rise. ISAs, particularly Stocks and Shares ISAs, also offer valuable, tax-free growth over the long term.

Tackling high-interest debts, like credit cards, is crucial at this stage, freeing up more money for saving. Check your State Pension forecast on GOV.UK and address any gaps in your National Insurance record.

With 10 years ahead of you, time is on your side, but now is the moment to start focusing on what retirement might look like.

Five Years to go – fine-tuning your finances

Five years from retirement, it’s time to polish your plan and safeguard your savings.

Review your pension pots—consider consolidating them for easier management and potentially lower fees. Gradually shifting to lower-risk investments helps shield your money from market dips.

Boosting pension contributions now also maximises tax relief, especially if you're a higher-rate taxpayer.

If you still have a mortgage, focus on clearing it. Begin exploring how you’ll convert savings into income, whether through an annuity or drawdown.

Planning for future expenses, such as travel or healthcare, helps create a clear and realistic savings goal.

One year to go - getting ready

With just a year left, focus on final preparations.

Confirm your retirement date and ensure all pension contributions are current.

Tax considerations become increasingly important. How you begin your decumulation—such as through tax-free cash—can impact your liabilities and allowances.

Continue de-risking your investments, ideally completing this phase soon. Ensure you have cash set aside for short-term needs and as a buffer against market shifts.

Test-drive your retirement budget to see if it’s comfortable, and adjust for potential costs like holidays and utilities.

How a financial planner can help

Not every retirement plan fits into a neat timeline. Your vision for retirement, including how long you’ll work and how you’ll spend your money, is personal.

Retirement planning doesn’t need to be overwhelming. By starting early, adjusting your strategy over time, and making final tweaks in the last year, you can build a secure future.

A financial planner can support you every step of the way, offering peace of mind and expert guidance.

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The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK. Welby is a trading name of Welby Associates Wealth Management Ltd Company Registered Number NI630504 who is authorised and regulated by the Financial Conduct Authority, FCA register number 697372. The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service please visit www.financial-ombudsman.org.uk

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