5 financial tasks to complete if you’re planning to retire in 2024

If 2024 is the year you’re planning to retire, you may have only a few short months of work left until you can start to enjoy the fruits of your labour. Whether you’re planning to travel, take up a new hobby, or simply spend more quality time with your family, retirement is certainly something to look forward to.

As well as planning all the lovely ways to use your free time, though, there are a few financial to-dos that could prove very handy to complete before you finish work.

Read on to discover some simple tasks that could help you to ensure your finances are in good shape before you take the first steps into your exciting next chapter.

1. Trace any lost pension pots

If you’ve worked for a few different companies during your career, especially since auto-enrolment was introduced in 2012, you may have multiple pension pots to your name. This means you could have forgotten pension funds sitting in a pot that you’ve lost track of over time.

Fortunately, it’s straightforward to track down your old pension pots. You can use the government’s pension tracing service to discover the details for your funds, then you just need to log in and update your contact details.

When you’ve reclaimed all your pension pots, you might find that they add a significant boost to your existing savings. In fact, FTAdviser reports that there could be a combined £26.6 billion sitting in lost pension pots in the UK, amounting to an average of £9,400 in each fund. So, taking the time to track down any lost pension funds could be very worthwhile.

2. Make the most of your Annual Allowance

As you’re likely already aware, contributing to your pension is a tax-efficient way to save for the future. This is because the Annual Allowance means that, in 2023/24, you can typically save up to £60,000 or 100% of your earnings (whichever is lower) into your pension and receive tax relief on the contributions at your marginal rate.

In some cases, you may be able to contribute more than the Annual Allowance and still receive tax relief. “Carry forward” means that any unused allowance from the past three years can be added to your allowance for this year.

If you haven’t used the entirety of your Annual Allowance for this tax year or the previous three, it may be helpful to consider adding more to your pension to benefit from tax efficiency.

After you have started taking a flexible income from your pension pot, you may be subject to the Money Purchase Annual Allowance. This means that, if you wanted to make further contributions to your pension, your Annual Allowance is reduced to £10,000 for 2023/24. If you contribute more than this, the tax relief you have received could be reclaimed.

So, it may be worth making the most of your allowance before you start to take a flexible income from your pot.

3. Consider how you’d like to take your income in retirement

Since the government introduced Pension Freedoms in 2015, you have more flexibility in how you access your retirement savings.

Now, as well as the option of buying an annuity when you retire, you can also consider taking a flexible income using drawdown. This allows you to withdraw funds from your pension as and when you need to.

There are pros and cons to consider for each approach, as shown below.

A third option that you could consider is to combine the two methods by buying an annuity with some of your pension funds and leaving the rest invested to access flexibly using drawdown.

The most sensible course of action will depend on your circumstances and goals, so we strongly recommend consulting your financial planner for guidance before you make your decision.

4. Make sure your estate plan is up to date

Your retirement can be a helpful milestone to review your estate plan and ensure it is up to date. This might include your:

• Will

• Expression of wish form

• Lasting Power of Attorney(s)

• In Case of Emergency (ICE) document.

By keeping these documents up to date, you can help to mitigate the impact of any difficulties you may face during your retirement. You can also help your family by making it easier for them to manage your affairs and finances after you pass away.

It’s sensible to meet with your planner to review your estate plan at regular intervals, and after milestone achievements such as buying or selling property, having a child or grandchild, or getting married or divorced.

Read more: 4 important documents you should create today to give your family peace of mind

5. Book a meeting with your financial planner

A meeting with your financial planner can be a helpful time to review your pension pots, investments, and other savings against your expected income needs in retirement.

This means you can feel confident that you’re set up for success following your imminent change of circumstances. Additionally, your planner can help you to look further ahead to anticipate how your income needs might change throughout your retirement.

When you have a clear idea of what you will need later on, you can take your retirement income strategically. This could help to ensure you’re able to enjoy yourself today while also being careful to set aside enough to pay for later-life costs.

Get in touch

If you’re thinking of retiring in 2024 and would like to speak to a local planner in Towcester for help with your finances, please get in touch.

Email theteam@fortitudefp.co.uk or call us on 01327 354321.

Please note

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.