Coming up to your Retirement can be an exciting and yet a daunting prospect. Especially if you feel unprepared for the new financial aspects that come along with your changing circumstances. A good time to start really planning for these changes is around two years before you are due to retire. This will give you enough time to see how much of an impact on your finances it will have and give you scope to seek financial planning if necessary. Consider some of the following tips.

Working out your Potential Income 

The first thing to consider would be how much income you’re likely to have when you retire. Obtain a state pension statement if you don’t already have one, this will help you assess how much you will be paid from your National Insurance contributions. If you have been paying into a separate private pension schemes or one provide details by your place of employment you should have statements from those to work how much you will be entitled to. If you have savings consider those in your budget and if you have investments that could be added to your income at retirement. If it all seems a bit of a daunting prospect then seeking financial advice from professionals might be a good idea for you.

Look for Ways to Boost and Budget your Assets

If you’re two years from retirement, realistically there is little you can do to greatly boost the amount you will retire on. But there are small things you can do to make the best of what you have and get the most out of your monies. For instance you could start paying more into your private pension scheme or put back the date you will start to draw it out. This could have an overall increased not  the amount you will get.

The odds are you will have less of an income and a smaller amount to live on after you retire. Travel to and from work will be gone so any costs that incurs will be over but your spending on such areas as heating, healthcare and private funeral plans etc may increase. Why not make plans to alter your spending habits now so that when the time comes where you have less of an income it will be easier. Set the pattern for your new way of spending a few years in advance so it is already in place for your  retirement. In any case make sure to draw up a budget to see exactly where your income will come from and how you will be spending it. Consider what changes you can make so that your life will be comfortable and secure.

Get Rid of Debts Beforehand

If at all possible, clear what debts you have remaining before you retire. A retirement free of debt will allow you the opportunity to enjoy what income you have without being stuck in a cycle of financial stress and anxiety. Fixed repayments of any loans or credit cards for example will take a large portion of your outgoings so in advance take steps to pay off remaining balances. First, see how much you owe and check the interest rates. Any spare money you have now could be used to clear those debts. There is also the option of your pension tax-free lump sum being used to clear such things as your mortgage. To be considered though is the effect this will have on your overall income, as taking a lump sum will lower the amount you receive from that pension scheme. Again if you’re not sure what choices to make, why not seek advice professionally or from friends or family who have experience in this field.

Making Final Choices and Getting Advice

Make a decision regarding when you would like to start drawing an income from your pension. You can still be working at the time when you begin to take your pension but the youngest age you can do this is 55. (Any exception on this would be for health reasons). You may have already decided in advance when you would start drawing from your pension scheme. A defined contribution pension scheme means you can take monies out however you choose so decide how you would like to do this. Ask your employer or private pension scheme provider if you could delay taking your pension and if this will incur any charges. Consider all your options. If you cannot afford to delay drawing from your pension try talking to a financial adviser. You may need to pay for this service so try going online and looking at your government pensions guidance. Help is always available either in you’re home or face to face so look for contacts that can assist you in your choices.

You no doubt have many things you would like to do when you retire. The world could be your oyster! As well as the morbid necessaries such as potential funeral plans and care options that go along with those later years, make sure you plan to make the most of your time and enjoy it to the full.