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Retirement: are you ready?

Retirement is a subject about which we are more than happy to daydream, imagining the time when we can throw off the shackles of the 9 to 5 and life is one unlimited holiday. Fewer of us spend much time when we are younger planning how this enviable life is going to be achieved financially and many of us panic when we reach more advanced ages and realise that the dream might be more of a nightmare.

The situation is not helped by the fact that this is an area in a state of flux with the Government planning to reform State Pensions, and new rules being introduced more quickly than the pension companies can keep up with concerning how we access non-occupational pensions and the tax implications of so doing.

There are tools out there that can help you with many financial websites including calculators enabling you to work out just how you reach your desired retirement income. The Government also provides a service whereby you can request a personalised statement which will give you an estimate of what State pension you are likely to receive based on your current National Insurance record. This was previously available once you reached the age of sixty, but the age from which the service can be used has recently been reduced to fifty-five which makes sense given that this is the minimum age from which benefits from a non-State pension can be drawn.

So the tools are there to enable us to plan for retirement and, given the different options that are now available once we get there, including taking an annuity, tax free lump-sum or drawing down over a period, it is important to get appropriate help from a financial adviser to reach the right decisions. At the same time it might also be beneficial to consider estate planning, and perhaps drawing up a Lasting Power of Attorney. If the planning is successful, and done far enough in advance, then those retirement dreams might become reality.