Retirement should be something to look forward to, not a source of financial anxiety. For many people it feels comfortably distant until, suddenly, it is not. Without a clear plan, you could reach retirement and find that the lifestyle you imagined costs more than your savings can support. The good news is that spotting a shortfall early gives you time to do something about it. These five questions to ask before retirement are a good place to start.
Two dates worth knowing
| Current normal minimum pension age | 55 |
| Normal minimum pension age from 6 April 2028 | 57 |
Subject to certain exceptions, such as plans with a protected pension age.
Five questions to ask before retirement
Work through these questions to ask before retirement in order, and write your answers down.
1. What does my dream retirement look like?
Start with the life you want to lead, not a pension figure. Think about travel, time with family, new hobbies, and the costs behind them, from essential household bills to holidays and support for loved ones. Spending often changes over time, with higher spending in the early years before priorities evolve.
2. Where will my retirement income come from?
You may draw on workplace and personal pensions, the State Pension, savings, investments or property. Knowing when each source becomes available is essential to building a sustainable income plan. Check your State Pension forecast and National Insurance record, because gaps could affect your eventual entitlement.
3. Am I saving enough?
A pension balance on a statement can be reassuring, but the figure alone does not tell you whether you are on track. What matters is how much income your savings could ultimately provide, and whether that matches the life you want. If your answers to these questions to ask before retirement show a possible shortfall while you still have years to go, you have more time to increase contributions, review your investments or adjust your plans.
4. How will I turn savings into income?
Pension freedoms give you choices. You could use drawdown for a flexible income while keeping your pension invested, buy an annuity for a guaranteed income, or combine approaches. The decisions can have significant tax and investment implications. Taking a large withdrawal in a single tax year could push you into a higher Income Tax band, while taking too much from drawdown could leave you with less money later.
5. What if life doesn’t go to plan?
A plan built only on everything going right can unravel quickly. Markets can fall, inflation can erode spending power and unexpected costs can arise. You may also live considerably longer than expected. Advice can help you stress-test your plans against different scenarios and turn a collection of pensions and investments into a coherent plan for the life you want. Going through these questions to ask before retirement with an adviser can make the answers far easier to act on.
Related reading: our retirement planning guide and what you will receive from the State Pension.
Discuss your situation with us
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Prefer to talk first? Call 0208 611 2521 (Wimbledon) or 01252 411 851 (Farnham), Monday to Friday, or email info@comptonfinancial.co.uk. In-person meetings in Wimbledon or Farnham are available by pre-arrangement.
This article is for general information and does not constitute tax, legal or financial advice. It should not be relied upon as such. A pension is a long-term investment not normally accessible until age 55 (57 from April 2028, unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up, which would affect the level of pension benefits available.
Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets beyond our control. Investments and the income from them may go down as well as up and you may get back less than the amount invested. Past performance cannot be used as a reliable prediction of future performance.
Compton Financial Services Limited is an appointed representative of New Leaf Distribution Ltd which is authorised and regulated by the Financial Conduct Authority (FCA). FCA number is 460421.
