Retirement is one of life’s biggest milestones, but preparing for it involves much more than simply choosing a retirement date. Taking the time to review your finances in the years leading up to retirement can help you make informed decisions and give you greater confidence about your future.

Here are five key financial decisions to consider before you retire.

1. Understand what retirement income you’ll need

One of the first questions to ask yourself is: What kind of lifestyle do I want in retirement?

Your retirement income should be enough to cover your essential living costs while allowing you to enjoy the things that matter most to you, whether that’s travelling, spending time with family or taking up new hobbies.

The Retirement Living Standards, developed by the Pensions and Lifetime Savings Association (PLSA), provide useful guidance on how much different retirement lifestyles could cost and can help you start planning realistically.

2. Review all of your pension savings

Many people have accumulated several pensions throughout their working lives. Before retiring, it’s worth taking the time to understand what you have, where it’s invested and when each pension can be accessed.

You may also want to check whether you’ve lost track of any old workplace pensions. The Government’s Pension Tracing Service can help you locate pension providers if you’ve misplaced their details.

Having a complete picture of your retirement savings makes it easier to plan effectively.

3. Decide how you’ll access your pension

Since the introduction of Pension Freedoms, there are several ways you can access your defined contribution pension, includingcash lump sums ,  drawing down income,  purchasing an annuity using a combination of all 3 options.

Each option has different benefits, risks and tax implications, so it’s important to understand how your decisions today could affect your income in the years ahead.

The MoneyHelper guide to taking your pension offers an excellent overview of the options available.

4. Think about tax

Retirement doesn’t mean you stop paying tax altogether.

Your pension withdrawals, State Pension and any other sources of income may all contribute towards your overall tax position. Planning how and when you take money from your pensions could help you mitigate  paying more tax than necessary.

Every individual’s circumstances are different, which is why seeking professional financial advice can be valuable before making significant decisions.

5. Review your wider financial plans

Your pension is just one part of your retirement picture.

It’s also worth reviewing your savings, investments, outstanding debts and any plans to support family members financially. You may even want to think about estate planning and whether your beneficiaries are up to date.

Regular financial reviews can help ensure your retirement plans continue to reflect your changing circumstances and long-term goals.

Retirement planning is about confidence

There’s no single formula for a successful retirement, but taking the time to make informed financial decisions can help you approach the future with greater confidence.

At iPensions Wealth, we work with clients to understand their retirement goals and create plans that reflect their individual circumstances. Whether retirement is just around the corner or still a few years away, starting the conversation early can help you make the most of the opportunities available and enjoy the retirement you’ve worked hard to achieve.

Investment risks

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