Can I Afford to Retire? A Practical Guide to Getting Retirement Ready

The information in this article is intended as general guidance only. It is not personal financial advice and does not take your individual circumstances into account. You should always speak with a regulated financial adviser before making decisions about pensions, investments, or retirement planning.

With the start of a new year, it is a natural time to pause, take stock, and assess whether you are on track to achieve the retirement you want. If you do not yet have a clear plan, there is no better time to begin than now.

Planning early in the year gives you the opportunity to review your current contributions and take advantage of any unused allowances, such as pension contributions or ISA subscriptions, before the 5 April tax year deadline. This can help you make more informed decisions about how your money could work harder for you.

For those in their 50s or early 60s, retirement often shifts from a distant idea to an approaching reality. This stage of life can bring excitement and anticipation, alongside understandable uncertainty. For those in their 30s or 40s, starting earlier gives you more flexibility and control over how your retirement plans develop.

At Stepwoods Financial Planning, we regularly speak with individuals across Essex, Hertfordshire, and London who feel they should have everything organised by now but are unsure where to start. If that resonates with you, you are certainly not alone.

This article is not about rushing into decisions. It is about helping you sense check your current position, understand what really matters to you, and take the first steps towards becoming truly retirement-ready.

Very few people have a perfect plan or all the answers. In fact, the most valuable outcome is often gaining better questions. Asking the right questions is what leads to clearer, more confident decisions.

Are You on Track for a Comfortable Retirement? Here’s How to Find Out

What Does “Retirement Ready” Mean? Key Signs You’re Prepared

Being retirement ready does not mean:

• Having a perfect plan
• Knowing all the answers
• Retiring tomorrow

Being retirement ready does mean:

• Knowing when you would like to retire and how you want to spend your time
• Understanding how much income you are likely to need
• Knowing what pensions, savings, and investments you already have
• Understanding the options available to you

Retirement readiness is about understanding the lifestyle you want and the level of income required to support it. When you have clarity around your needs and how your pensions and savings could provide that income, it becomes much easier to identify potential gaps or opportunities early on.

This clarity can significantly reduce uncertainty and help you approach retirement planning with greater confidence and peace of mind.

Retirement Readiness Checklist: What to Review Before You Retire

Before meeting with clients to discuss retirement planning, we typically ask them to gather a few key pieces of information. This helps create a strong foundation for a productive and meaningful conversation.

1. How much have you already saved for retirement?

Over the course of a working life, many people build up:

• Multiple workplace pensions from different employers
• Older pension schemes that are easy to lose track of
• A combination of ISAs, savings accounts, and investments

If your answer is “roughly” rather than an exact figure, that is completely normal. The important thing is knowing where to start.

2. What income could your pensions provide?

The value of a pension does not automatically tell you how much income it can deliver in retirement. Rules, terminology, and options can be complex and are subject to change.

Key questions to consider include:

• How much can you withdraw each year on a sustainable basis?
• How long does your pension need to last?
• What impact could market falls have early in retirement?
• How much tax might you pay on withdrawals?
• What income will your State Pension provide?

These are planning considerations rather than predictions, but they are essential for building a realistic picture. It is also important to compare this potential income with both what you need and what you would like in retirement.

3. Do you understand your pension options?

As you approach retirement, a number of important decisions may need to be made, including:

• Taking tax free cash
• Buying a guaranteed income through an annuity
• Using drawdown for flexible income
• Delaying pension withdrawals and using other savings first

Each option has advantages and disadvantages. There is no universal right answer. The best approach depends entirely on your circumstances, priorities, and long-term goals. Your retirement strategy should reflect your individual situation.

4. Are you prepared for tax in retirement?

Tax often comes as a surprise to retirees. Common issues include:

• Paying unexpected income tax on pension withdrawals
• Not using allowances as efficiently as possible
• Paying more tax than necessary over the long term

With careful planning, it may be possible to manage tax more efficiently, helping your money last longer and reducing unnecessary leakage over time.

Why People Delay Retirement Planning – And Why It Matters

We often hear comments such as:

• “It feels complicated.”
• “I do not think I have enough.”
• “I will deal with it later.”
• “I have other priorities right now.”

Starting earlier allows you to clearly understand what you want from retirement and to separate essential living costs from the discretionary spending that brings enjoyment. It also gives you time to shape your pensions and savings into an income that supports both.

With that understanding, retirement planning becomes far less daunting. Instead of feeling distant or uncertain, it becomes something you can actively work towards with clarity and confidence.

Start Your Retirement Planning Today – How to Take Control of Your Retirement Plans This Year

This could be the year you bring structure and direction to your retirement plans, taking control rather than leaving things to chance.

Being retirement ready does not require making irreversible decisions. It simply involves:

• Bringing all your pensions and savings together
• Understanding your current position
• Clarifying the lifestyle you want in retirement
• Identifying potential shortfalls or opportunities early

Speak to a Retirement Planning Expert

If you would like clarity on whether you are on track for a comfortable retirement, a no obligation conversation with an independent, regulated financial planner at Stepwoods could help you better understand your position, your options, and the key factors to consider.

Speak to a financial adviser today to find out more.