When I wrote The Good Retirement Guide 2018 I had one overriding objective: to help people achieve a better retirement. Over the years I have drawn on my experience in financial services regulation, on giving business and taxation advice and, significantly, helping people prepare for retirement.
Below are some practical hints and tips from my guidebook that will help untangle many of the complex decisions and issues that can disrupt your happiness in retirement.
Do you want to do more with life?
Some people don’t want to retire yet, but instead actually want to earn more or simply 'do more' ahead of retiring. One way to do this is to start your own small business or find an alternative opportunity in working for others (including volunteering). Here are the essentials to consider when looking into this:
Understand the differences between starting a small business and going back into employment, especially if both options are still open to you.
Look into administration, finance and tax – keep on top of the paperwork or it will keep on top of you!
Once you’ve filled the diary with work, really grasp the power of marketing that will make a difference and doesn’t actually cost much (and free is even better).
Think also about volunteering opportunities – there are many but have a look into the Citizens Advice Network to get started – there could be a perfect role for you there.
If you are considering getting a job, refresh your CV and swot up on interview tips. Unsurprisingly it’s still all about preparation and presentation.
Tackling finances
Ahead of retirement you should also face the fears of finances. I really do get it when people say they are overwhelmed by financial information relating to pensions and tax as they are tough areas to tackle (especially as it was reported in 2016 that the UK tax code was now a massive 20,000 pages long, which is 12 times the length of the Bible).
From those looking into their options ahead of retirement, and also those who are part of the ageing population, there is a lot of information to consider:
Could you get help from www.taxaid.org.uk? Their remit is to support vulnerable people in dealing with tax and HMRC queries.
To find out how much money you’ll have in retirement, the government’s impartial service www.pensionwise.gov.uk can help provide useful guidance.
Always get proper financial advice and ensure your adviser is on the Financial Conduct Authority.
Beware of the ‘pensions predators’. There are unauthorised advisers trying to help you get your hands on your pension before the age of 55. Accessing pensions before 55 is almost impossible and you’ll probably get stung irrespective of how impressive they may seem (remember crooks in suits are clever!).
Here are some key tips to consider when looking at your finances:
Split your savings up so that no more than £85,000 is held per bank and check the institution is covered by the Financial Services Compensation Scheme. Cover after certain life events (selling a house) may get you £1 million coverage for a short period of time.
Use your £20,000 ISA allowance by 5 April of this year or the tax shelter for that amount will be lost forever.
Use up gains of £11,300 by 5 April this year without paying tax if you hold shares that are not ‘protected’ from tax by one of the special tax wrappers (like an ISA).
Reduce your Inheritance Tax liability by gifting. Larger gifts are normally tax-free if the giver survives a further seven years. New Inheritance Tax rules since April 2017 can allow the IHT limit to increase from £650,000 to £1 million when a house is involved and money is left to your children – don’t guess, get advice.
If you and a partner are both basic rate taxpayers you may be able to transfer part of your Personal Allowance to make you jointly more ‘tax efficient’ if you are a married couple or in a civil partnership.
There’s no place like home
Another crucial consideration in preparing for retirement is future proofing the place you call home. This means taking an in-depth look at where you currently live and deciding if it will work for you in your retirement. Downsizing in the area, staying put, moving to a new area, and removing those rose-tinted glasses when considering a new home abroad all present pros and cons and need some clear-head thinking.
Relationships
Retirement also brings a big change to the dynamics of your personal relationships. If your life was your work, the change will be bigger than you could have realised as you won’t be seeing the same people every day.
It might be time to move on now or at least time to get ready for the changes that retirement bring, so remember those that matter most to you. Your partner, children, parents and close old friends will be a great support system, and then we also have the new friends that will emerge from new social groups.
All of these need a bit of reprogramming ahead of retiring as good relationships promote good health. After all, Mahatma Gandhi did say ‘It is health that is the real wealth and not pieces of gold and silver’
Final points to consider
Wills are a ‘must do’. Will Aid is a helpful resource and suggests £95 for a single basic will and £150 for a pair of basic ‘mirror’ wills, and the solicitor will do this for free if you make the charity donation.
Executors are even more important than the best man or chief bridesmaid at a wedding – so choose wisely.
Powers of attorney. Enduring powers of attorney, a financial and property lasting powers of attorney and what about a health and welfare lasting power of attorney. Confused already? Well it’s time to get your head around this as these are the magic wand of life planning.
Do your research on help with end-of-life care, dealing with a death and state benefits. There are many organisations who care and can help – try AgeUK for starters.
With any luck all of this information will contribute to you preparing for a great retirement. If I was asked to sum up the whole purpose of The Good Retirement Guide 2018, I'd go for 'Save more, live better, be happier’, so I hope you’re able to achieve this.
