Retirement in 2020: 7 things to consider for the thousands set to reach state pension age

In 2020, more than 500,000 people will reach state pension age, according to calculations by Legal and General, based on ONS Mid Year Estimates for 2018, released in 2019. From learning new skills and exploring the world, to caring for loved ones or retiring for work due to health reasons, there are countless reasons why a person will retire.

“Some continue to work, others go back to college, some start a business, and many take up a hobby. With people living longer and pension freedoms having brought more autonomy, those approaching retirement need to take time to consider what they want from this exciting chapter.

“As a starting point, it’s worth thinking about these seven considerations, and setting aside some time every week to think about what works for you and your family.”

In a bid to help people navigate this milestone, Ms Byron has highlighted seven things to consider at this stage of life.

1. Thinking about the shape of your retirement

“Retirement is no longer linear,” she said. “Some people continue to work into their 70s, while others jump at the chance to slow down.

“For some it’s unpredictable and overwhelming, for others it’s a positive experience, with many new opportunities.

“Whatever you decide, spend time mapping out a plan. Without this, many people can experience a loss of identity and a lack of purpose.”

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2. Getting your finances in order

“If you have had multiple jobs over your lifetime, the likelihood is that you have multiple pension pots.

“The first step is to trace any lost and forgotten pension pots, find out what you have, and think about whether you want to bring them together under one roof.”

3. Making a budget

“Once you know how much money you can access in retirement, think about the lifestyle you want and how much income you need to fund it.

“The Legal & General Retirement Calculator help you work out how much your pension could give you, based on your age. You can then add any other savings or investments into the mix, as well as the state pension.

“You can find out what you will receive by getting a state pension statement.

“When budgeting, consider any potential changes to spending habits, and factor in likely reduction in income. Small reductions across the board can really add up. While learning to manage your finances won’t necessarily result in more income, it will help you make the funds you have available go further.”

4. Thinking about how to make your money last

“The reality of planning for retirement in a post-pension-freedom world is complicated.

“There are so many options now, and thousands of people are accessing their pensions without planning. Don’t be one of them. Not having a plan could leave you short of funds in later life, or even see you become overly modest with the amount you access.