Retirement planning checklist: seven questions to ask before you retire

Retirement planning is easy to put off. It can feel distant, complicated or uncomfortable, especially if you are not sure how much you have saved, how much income you will need or when you may be able to stop working.

A retirement plan is not only about pensions and investments. It is about understanding the life you want in the future, the income you may need to support it and whether the money you have built up is working hard enough to help you get there.

With people living longer, many hoping to retire earlier and living costs still rising, reviewing your position early can make a meaningful difference. The questions below can help you build a clearer retirement planning checklist and identify where advice is essential.

1. What kind of retirement lifestyle do you want?

A good retirement plan starts with the life you want, not just investments or savings. Before looking at pension statements, we usually encourage clients think about how they want their future to look. Will your mortgage be repaid before you step back from work? Do you want to travel more, support family, or stop work completely?

The Pension and Lifetime Savings Association’s UK Retirement Living Standards provide a useful reference point. The standards show estimated annual spending for minimum, moderate and comfortable retirement lifestyles. Current figures suggest a one-person household may need around £13,900 a year for a minimum lifestyle, £32,700 for a moderate lifestyle and £45,400 for a comfortable lifestyle. For a couple, the equivalent figures are around £22,500, £45,400 and £62,700. These figures are UK focused and may not include all items of expenditure for every lifestyle, however they help frame the discussion.¹

2. How much income will you need in retirement?

Once you have a lifestyle in mind, translate it into an income target in today’s money. Someone who needs £45,000 a year today should also consider how inflation could increase that figure by retirement.

This can be difficult to estimate, especially if retirement still feels some way off. The aim is not to predict every future cost perfectly, but to create a realistic starting point that can be reviewed over time.

It is also important to distinguish between gross income and net spending. Pension withdrawals, annuity income and investment income may be taxable, so the gross income required may be higher than the amount you want to spend.

There is no easy single answer to how large a pension pot needs to be. It depends on retirement age, life expectancy, returns, inflation, charges, tax and flexibility. However, setting a target turns retirement from an abstract idea into a measurable goal.

As a broad illustration, someone seeking £20,000 a year from private pension savings may need a much larger pot than expected. A common rule of thumb is that a sustainable pot may need to be around 20 to 25 times annual withdrawals, although this is not guaranteed. On that basis, £20,000 gross income a year could require roughly £400,000 to £500,000.

3. Do you know what pensions, savings and investments you have?

Many people reach their 40s, 50s or early 60s with several pension arrangements from different employers, personal plans or schemes in different jurisdictions. That can make it difficult to know what you have, how it is invested and whether it still suits your plans.

The first step is to build a clearer picture: current values, contributions, investments, charges and retirement benefits.

This is also where professional wealth planning helps. A Wealth Planner can help you understand what you have, where it is held, how it is invested and whether each arrangement still supports your retirement goals.

Once everything has been brought together, it becomes easier to assess whether you are on track and identify any gaps, opportunities or pension arrangements that may need further review. We can then help you create or review your retirement plan, including highlighting low contribution levels, default funds that may no longer suit your objectives or older schemes with valuable guarantees that should be preserved.

4. Is your pension invested in the right way for retirement?

Investment risk within a pension can have a major impact on the value of your retirement savings. Contributions matter, but how they are invested is just as important. A pension invested too cautiously for too long may struggle to keep pace with inflation or deliver the growth needed for a comfortable retirement.

This does not mean taking unsuitable risk. It means matching investments to age, time horizon, objectives, attitude to risk and capacity for loss. If you are many years from retirement you may accept more volatility for long-term growth. As you get closer to retirement, the focus may shift. You may still need growth, but you may also need to think more carefully about protecting your savings from sharp falls at the wrong time.

5. Are you contributing enough towards retirement?

The earlier contributions are made, the longer you benefit from investment growth. Even modest increases can make a significant difference too. One of the reasons early contributions can be so powerful is the effect of compounding, where investment growth has the potential to generate further growth over time. Put simply, the longer your money remains invested, the more opportunity it has to grow. Employees should check whether employer matching is available and whether they are making full use of it.

Business owners, self-employed individuals and those with irregular income may need to plan contributions more deliberately around cash flow, tax, succession and wider assets.

Private pension savings should be considered alongside any state pension entitlement. In the UK and Crown Dependencies, the amount of state pension depends on the contribution record built up during your working life (National Insurance in the UK for example). In addition to where you are currently residing, you may also have entitlement to state pensions from previous jurisdictions where you have lived and worked. These benefits can provide an important foundation for retirement, but for many people they will form just one part of a wider retirement income plan.

Requesting pension forecasts is therefore important. A forecast can show what you may receive, when it may become payable and whether there are gaps in your contribution record.

Where there are gaps, it may be worth considering whether further social security contributions can be made and whether credits or reliefs could improve your future entitlement, particularly for those who have worked in multiple countries, taken career breaks, been self-employed or reduced their hours.

6. Have you considered all sources of retirement income?

A pension is often the cornerstone of retirement planning, but rarely the whole picture. Savings, investment portfolios, property, business interests, inheritance or other assets may also support retirement income.

Rental income can provide valuable cash flow and for some, property can form a significant part of personal wealth. However, it should be assessed realistically, allowing for periods when a rental property is empty, maintenance, tax, insurance, mortgage costs, management fees and the fact that property is often illiquid.

Other investments, such as investment accounts, deposits, bonds, shares, funds or structured savings, may provide flexibility. Looking at these assets together can help you make better decisions about where retirement income should come from, where to draw it and how to manage it as tax efficiently as possible.

7. Should you consolidate old pension pots?

Having several pension pots in different places can make it difficult to understand exactly where you stand. Pension consolidation can simplify administration, provide a clearer picture of total retirement savings and make your investment strategy easier to manage. It can also make it easier to monitor progress against your income target.

However, consolidation is not always right. Some pensions may include guarantees, protected tax treatment, favourable retirement ages, defined benefit promises or exit penalties. Before transferring or making any decision, it is essential to get advice to understand what you might be giving up, what charges apply and whether the new arrangement would be suitable for your circumstances.

Bringing your retirement plan together

Retirement planning becomes easier when you can see the full picture. By understanding what you have, what income you may need and which actions could make a difference, you can make more confident decisions - whether retirement is many years away or starting to feel much closer. This is where retirement planning can help: bringing your pensions, investments and wider financial position together so you can see whether you are on track.

¹ Retirement Living Standards update shows the nation is not saving enough | Pensions UK