Retirement is one of life’s biggest transitions, with financial, practical and emotional considerations. While entering the next chapter is exciting, it is natural to feel some anxiety around ensuring you are prepared and will be able to maintain the lifestyle you’ve worked hard to build.
The earlier you start thinking about your retirement plan the better. But no matter how close you are to retirement, there are always actions you can take to improve the next phase of your life. Whether you’re ten years out or just a day away, here’s a timeline to help you prepare for the retirement you deserve.
10 Years to Go: Dream and Define
Define your goals
This is the perfect time to take stock and start shaping your vision for retirement. Some key questions to ask yourself what the next chapter looks like for you include:
- Do you see yourself fully retiring, or would a phased transition into part-time work suit you better?
- What kind of lifestyle do you envision for yourself? Travelling, volunteering, relocating?
- What will bring me purpose and joy in this next chapter?
Clarifying your vision now will help guide your financial decisions over the coming years.
Assess your savings
Use this time to get a clear picture of your retirement savings. A pension calculator can give you a snapshot of your current position. Include ISAs, investment accounts, additional properties, and other assets in your overall retirement picture. Finally, don’t forget about your state pension, which you can claim at 66 (rising to 67 in 2028 and 68 in 2046).
It is also a good time to do some housekeeping on your finances.
- Tracking down old or lost pension pots, particularly older ones that may have been linked to previous employers.
- Review your investment strategy and consider your risk tolerance.
- If you have debts, now is a good time to start paying them down.
Supercharging your pension contributions
If you have surplus income or capital, consider increasing your pension contributions, either by increasing your regular contributions or making one-off lump sum payments. Many employers operate matching schemes if employees increase their monthly contributions beyond the minimum, so boosting this could offer a double benefit.
When considering increasing your pension contributions, it is worth bearing in mind that for most people the annual pension contribution allowance is £60,000, or 100% of your UK taxable earnings, whichever is lower. Contributions within this limit benefit from tax relief at your marginal rate, and your investments grow free from income and capital gains tax. However, if your adjusted income exceeds £260,000, your annual allowance may be tapered down to as little as £10,000.
Another option to bear in mind is if you haven’t used your full allowance in the past three tax years, you may be able to carry forward unused allowances, which would potentially allow you to contribute more than £60,000 in a single year.
April 2027, pensions will no longer be exempt from inheritance tax. That means that inheritance tax may have to be paid on your pension when you die.
One thing to note when considering this option is that from April 2027 onwards, your pension will no longer be exempt from inheritance tax, so adding to your pension could be adding to your IHT liability. As such, it is worth discussing with your planner if this is the right move for you.
Explore other tax efficient savings options
Additionally, you could also look to utilise other tax efficient savings vehicles such as ISAs, which have no tax applied to growth or withdrawals. Maximising your annual ISA allowance (currently £20,000) is a useful option to boost retirement savings. They can be a flexible complement to your pension savings.
Review and Refine Your Plan
Ten years may feel like a long time, but it can pass quickly. Once you’ve defined your goals and assessed your savings, you’ll have a clearer picture of whether you’re on track.
If there are gaps or shortfalls, now is the time to act. Engaging with your financial planner at this stage can help you build a plan that aligns your aspirations and financial situation. With a decade until you plan to retire, this gives you a good runway to enact change and optimise your strategy for your ideal retirement.
5 Years to Go: Focus and Fine-Tune
Clarify your retirement date
Now is the time to get more specific. Five years is still plenty of runway to make meaningful changes. Deciding at this stage more precisely when you want to retire, can help you plan more precisely. Some things to bear:
- Day-to-day living expenses
- Travel, hobbies, or other lifestyle goals
- Healthcare costs
- Support for family or dependents
Using a retirement calculator can also be a very useful tool. Your financial planner can also help you here to think about this and model different scenarios. This can help you assess if your savings plan is currently on track to meet your needs.
Review Your Investment Plan
As you get closer to retirement, continue to refine your investment plan. With five years to go consider if your risk tolerance has changed? Your portfolio should reflect your timeline and tolerance for volatility.
You could also consider consolidating pensions for easier management and potentially lower fees.
Remember, supercharging your pension and exploring other tax efficient savings options (as outlined above in the 10 Years to Go section) are key options to explore if you are five years away from retirement.
Consider Your Tax Position
As you get closer to retirement, it’s important to think about how you will access your retirement income and think about your tax position. Efficient planning now can reduce your tax burden later. Most people can withdraw a tax-free, lump-sum from their pension of 25%, but further withdrawals may be subject to income tax. However, income taken from other sources may not be subject to tax: withdrawals from an ISA are tax-free.
How you access your pension funds and tax rules can be complicated, and as such it is worth speaking to your financial planner about the most efficient way for you to access your income in retirement, and how this can impact your saving strategy in the coming years.
Speaking to your financial planner
With five years to go, this is a crucial moment to discuss your retirement plan with your financial planner. They can help you fine-tune your strategy, ensuring your savings, investments, and tax planning are all working in harmony.
1 Year to Go: Get Granular
With just 12 months to go, it’s time to shift from planning to preparation. This is your opportunity to tie up loose ends, make key decisions, and ensure everything is in place for a smooth transition into retirement.
Confirm Your Retirement Date
Now is the moment to take a big red pen and circle a date in the calendar! Setting a firm retirement date can help you plan around your final salary and potential bonuses, time your pension withdrawals and focus your plans. This could also be the time to notify your employer, especially if you have plans around reduced hours or phased retirement.
Review Your Income and Withdrawal Plan
Get even more granular with your income plan. Finalise how you will draw income and exactly how much you will need on a regular basis. Additionally, you may want to add any considerations around a larger one-off withdrawal if you are planning a larger purchase to celebrate your retirement!
Your financial planner can help you build a sustainable withdrawal strategy that balances flexibility, tax efficiency, and long-term security.
Review Your Investments
Continue to refine your strategy as retirement approaches and adapt as your circumstances and risk tolerance and income needs change, as well as assessing your exposure to market volatility.
Get Your Paperwork in Order
Get your paperwork in order and ensure everything is current and accessible. Make sure you have access to your pension statements and access details; your ISA and any investment account information; wills, powers of attorney, and beneficiary nominations.
Speak to a Financial Planner
This is a crucial time to get expert advice. Your planner can make sure your income strategy is aligned with your needs and tax efficient, your investment strategy is aligned with your current goals, and your plan is robust and realistic.
6 Months to Go: Prepare the Launchpad
With just half a year to go, it’s time to put your plans into motion and make sure everything is lined up for a smooth transition.
Notify Your Employer
If you haven’t already, confirm your retirement date. This gives your employer time to plan and ensures you understand any final HR steps like final payslips, unused leave, or handovers.
Submitting Pension Access Forms
Some pension providers require several months of notice to begin processing your retirement income. Your financial planner can help ensure this is a smooth process.
Review Your Budget
Going over your budget again is a great idea, especially if there are likely to be any large one-off costs as you plan projects for the next chapter.
Check Healthcare and Insurance
If you’ve had private health cover through work, consider whether this is something you wish to retain. Also review any other benefits you’ll lose and whether you need to update life or income protection policies.
Plan Your New Life
Retirement is more than just a financial change, it’s a lifestyle change. Start to think and about
- How will you spend your time?
- What will bring you joy in your retirement?
- Are there hobbies you have longed to take up?
- Would you like to explore volunteer work?
- New routines to replace the structure of work
Take a moment to check in with how you’re feeling. Is this something you are approaching with unbridled excitement, or are you more apprehensive? If you’re anxious, that’s normal too. Identifying what’s causing uncertainty now gives you time to plan around it. With six months to go, you can start to address some of those concerns by planning new routines and habits. How do you want to spend your mornings when the alarm clock is no longer needed?
1 Month to Go: Final Checks
With just a few weeks left, it’s time to double-check the details and make sure everything is ready for day one of retirement.
- Confirm your your first pension payment date and that your bank details are correct
- Set up direct debits for regular expenses
- Ensure you have easy access to cash for the first few months
- Organise a celebration or farewell with friends or colleagues
- Draft a goodbye message or out-of-office note
- Start easing into a new routine that supports your wellbeing
- With just a few weeks left, it’s time to tie up loose ends and make sure everything is ready for day one of retirement.
1 Day to Go: Reflect and Relax
Take a moment to tie up any loose ends and reflect not only on your career, but on the years ahead.
And, finally, celebrate! Capture the moment so you can look back on it with pride. Whether that’s a quiet coffee, a dinner with loved ones, or a farewell toast. Take a moment to appreciate the journey and look ahead to an exciting new chapter you’ve worked hard for.
This article should not be regarded as financial advice. The value of your investments can go down as well as up and you may get back less than you paid in. Information is based on our understanding in July 2025. Investment growth isn’t guaranteed and it’s possible that you could get back less than you paid in. Tax rules can always change in the future. Your own circumstances and where you live in the UK could have an impact on tax treatment. Aberdeen is not responsible for the information, accuracy and views of external sources.