Five years to retirement: a practical checklist
The last five years before you stop full-time work are when abstract “someday” becomes dates on a calendar. Pension providers start sending retirement quotations, friends discuss State Pension age, and you wonder whether the numbers will hold.
FinPlanly helps you model estimates; we are not authorised to tell you when to retire or how to draw your pension. Use this checklist as structured information and involve regulated advisers for complex decisions.
Five years out: gather the facts
Collect every pension statement — workplace, personal, SIPP, and any defined benefit schemes from earlier employers. Note:
- Current transfer value or projected income
- Normal retirement age for each scheme
- Charges and investment funds
Trace missing pots via finding lost pensions if employment history is patchy.
Check your State Pension forecast on GOV.UK — see State Pension basics. Confirm your National Insurance record and whether you will reach full entitlement.
List other assets: ISAs, general investments, cash, property equity, and expected inheritances (treat inheritances cautiously in planning).
Estimate spending — use current bank statements to categorise essential vs discretionary costs. Compare with how much to retire frameworks.
Four years out: test your retirement date
Run scenarios in FinPlanly’s plan tool:
- Retire at 62 vs 65 vs State Pension age
- Part-time work for three years
- Higher or lower investment return illustrations
Look for gaps between spending needs and projected income. Small contribution increases still have time to matter, though less than in your thirties.
Review mortgage end date. Entering retirement with no housing payment changes cash needs dramatically.
Three years out: understand access rules
Private pension access age (minimum pension age) is separate from State Pension age. UK rules have been changing; verify current law before assuming you can access pots at a given birthday.
Learn about tax-free lump sum rules for defined contribution pots — percentages and protections changed when the lifetime allowance charge ended; complex cases need specialist input.
If you have defined benefit income, read whether taking it early reduces payments permanently.
Two years out: refine drawdown strategy
Think how you might take income — annuity purchase, drawdown, mix of both, or phased lump sums. Each has tax and longevity implications beyond this article’s scope.
Build a cash buffer illustration — some retirees hold one to three years of essential spending in easy access accounts to avoid selling investments in a downturn early in retirement.
Review investment risk in pension funds. Lifestyle defaults may de-risk automatically; confirm alignment with your planned withdrawal date.
One year out: practical admin
- Tell employers or clients about retirement timing if relevant.
- Confirm exact pension process — forms, proof of age, bank details.
- Update beneficiaries on pensions and life policies.
- Check will and power of attorney are current.
- Explore Pension Wise (free, government-backed appointments) for DC pension guidance at 50+.
Six months out: tax and benefits
Understand how pension withdrawals stack with State Pension in the same tax year. Personal allowance use, emergency tax on first withdrawals, and Marriage Allowance may appear.
If you might qualify for Pension Credit or other benefits, investigate before taking large lump sums that affect means tests — rules are intricate.
Health and contingency
Long-term care costs are uncertain but real. You cannot insure every scenario cheaply; knowing whether housing wealth might fund care is part of honest planning, not fearmongering.
Lifestyle rehearsal
Some people trial retirement spending by living on their target budget for a few months while still employed. Surprises emerge — hobbies cost more, travel less, utilities higher at home.
After you retire: keep monitoring
Retirement planning does not end at the party. Review withdrawals annually, watch inflation, and adjust discretionary spending. FinPlanly remains useful for what-if illustrations as life changes.
Couples and different retirement dates
If one partner retires before the other, household income may mix employment, pension drawdown, and rental income temporarily. Discuss whether to delay the second State Pension claim, how to split bills, and whether the working partner should maintain pension contributions to use remaining annual allowance — illustrations only unless you seek advice.
Digital life admin
Update online accounts with mobile numbers that will still work abroad if you relocate. Pension portals often rely on two-factor authentication to old work emails — migrate to personal email while HR still knows you.
When to get professional help
Consider an FCA-authorised adviser for:
- Large defined benefit transfers (compulsory advice already required in many cases)
- Multiple pots and tax planning across years
- Inheritance and estate issues
- Overseas pensions
MoneyHelper offers free, impartial guidance as a first step.
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*This article is general information for UK readers, not financial advice. FinPlanly is not authorised or regulated by the Financial Conduct Authority. Pension and tax rules change.*
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