Approaching retirement shortly?
If you are thinking of retiring shortly you need to think
about your pension fund and where it is currently invested. If you are investing
in a range of equity linked investments it would be wise to consider consolidating
your funds and switching to cash whilst the advisory process is taking place.
This would avoid any volatile stockmarket swings having a significant impact
on your pension fund just as you are ready to buy your annuity. Over recent
years the stockmarket appears to be reacting with great volatility and therefore
a switch to cash once you have decided to take benefits can be advantageous.
Buying an annuity or taking other types of retirement product can take around
6 to 8 weeks to complete and therefore switching to cash during this period
provides a considerable amount of stability in the run up to retirement.
1 year before retiring
- Check pension funds, obtain valuations, make sure you have a State pension
forecast.
- Consider the amount you have in your fund, would a top up be appropriate
? Immediate vesting might be appropriate contact your adviser
for further information.
- Work out your probably income requirements in retirement.
- Consider phased switching to cash over the coming year
3 months before retiring
Its important that you get the process started at this point
as delays from existing insurers can cause serious problems. Researching and
advice can take at least 5-8 weeks depending on how complicated your pension,
financial and personal affairs are. Clients have also been caught up in postal
strikes which can severely dealy the process as original signatures have to
be obtained and information from insurers has to be exchanged.
- Obtain independent financial advice. Make sure authority is placed with
the new advisor so that details of the existing policies can be studied.
- Consider switching to cash fund to consolidate pension gains if not already
done.
- Consider your spouses requirements in retirement and in case of being
widowed.
- Consider the importance of leaving pension monies to dependants /children.
- Consider immediate vesting.
- Consider income requirements and inflation during retirement.
- Consider your risk tolerance - if you're unsure about your risk tolerance
we can provide a risk questionnaire.
- Ensure that your paperwork for State Pension is in order and that your
claim is being processed etc.
- Consider debts, mortgages, credit cards - should these be paid off early
with tax-free cash ?
- Consider if part of your tax free cash is to be spent on an earmarked
item.
- Ensure enough contingency cash available.
- Consider how much tax free cash you want from your pension.
