Retirement regrets and how to avoid them

couple on beach

First, the good news. Research1 shows that nine out of ten recent  retirees are really enjoying their retirement. Freed from the  restrictions of working life, they can pursue their hobbies, take lots of holidays and spend more time  with their families.

Where people have regrets, it’s often to do with the way they planned for their retirement and the decisions they did or didn’t take about their finances whilst there was still time.

NOT SAVING ENOUGH

Some people wish they’d taken the opportunity during their peak earning years to put more into their pension pots. Even small sums saved earlier in a working life can mount up over the years. There’s valuable tax relief available on pension contributions, providing an extra encouragement to save.

NOT PLANNING EARLY ENOUGH

It really pays to plan early and keep an eye on how your pension is progressing during your working life. That way, you can think about making additional contributions, or saving into tax-efficient savings accounts like ISAs to boost your income in retirement.

NOT SEIZING THE OPPORTUNITIES

Older pensioners often regret not having travelled more while they felt able to do so. It’s often said that there are two times in retirement, when you are healthy, and when you are not. It’s a good idea to plan your finances in such a way that you can spend more on leisure pursuits and travel in your early more active retirement years, whilst at the same time keeping funds in reserve to cover the likely cost of care in later life.

GETTING ADVICE ON YOUR PENSION OPTIONS

Should you opt for an annuity? Go into income drawdown? Take a tax-free lump sum? Defer your state pension? These are just a few of the questions you might need to consider as you approach retirement. Each one of them has implications for your future, and each one requires some careful thought.

Not getting appropriate advice is often mentioned as a regret by those people who feel they made poor financial choices when they retired. Taking professional advice from an Independent Financial Adviser can help you understand the implications of each of them in the context of your financial circumstances.


1 Prudential, 2016

A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.