How to be a golden oldie by getting nifty at 50

TURNING 50 is a major landmark and one of the most important things you can do at this point is draw up a financial plan to determine how you expect to fund the rest of your life. At this age, you are old enough to understand the importance of saving for your retirement, but young enough to make up for lost time.to make sure you turn 80 in a good financial state, you need to make full use of your fifties.

Nathan Valbonesi, financial planner at Weatherbys Private Bank, said this is a good age to work out how much you need to save in your pot to maintain your current lifestyle: “You should also take time to manage your wealth in the most tax-efficient way.”

Running throughvalbonesi’s top 10 essential checklist for over 50s should help you prepare for your retirement in advance.

CHECK STATE PENSION VALUE

To find out whether you are on course to get the full basic state pension, or need to plug any gaps in your National Insurance contributions record, request a state pension forecast using application form BR19 from the Gov.uk website.

CONSOLIDATE YOUR PENSIONS

If you have accumulated a range of personal and company pensions throughout your career, it can be easy to lose track of them.

So consider consolidating them into a single scheme.valbonesi said: “By combining your pensions into a self-invested personal pension (SIPP), they should be easier to manage and you may save money on charges.”

REVIEW YOUR ASSET ALLOCATION

Younger investors can take more investment risks, as they have time to recover from a stock market crash.the over 50s tend to be more cautious.

Typically, older people hold fewer shares as they age and more bonds, but Valbonesi said: “It’s not a one-size-fits-all option.what you do depends on your attitude to risk. As more of us leave our money invested after retiring, rather than buying an annuity, we need to keep some exposure to the stock market to ensure our money keeps on growing.”

CHECK YOUR PENSION LIMIT

There is a limit on the total value of pension benefits you can build up throughout your lifetime, known as the lifetime allowance (LTA).

Once you exceed £1,073,100, you could face a punitive tax charge of up to 55 per cent. “That may look high but many doctors and other senior NHS staff may breach it.the LTA has been frozen until 2026, so more could get caught.”

TAX-FREE CASH QUESTION

From age 55, you can withdraw 25 per cent of your pension free of tax. Taking that money in your fifties will reduce your retirement income when you finally retire, so tread carefully.

“Taking cash and sticking it in a bank account may not be prudent given today’s low interest rates, plus it may count towards your estate for inheritance tax, while your pension does not,” Valbonesi said.

WRITE OR UPDATE YOUR WILL

Making a will can spare your family a major headache after you die. Without one, you risk depriving your spouse or partner of their home, increasing their inheritance tax burden, or leaving parts of your estate in the wrong hands.

“Even if you have made a will, now is the perfect time to check it is up to date, especially if your circumstances have changed.”

EXPRESS YOUR WISHES

Completing or updating an “expression of wishes” form will ensure that all the death benefits on any of your pensions go to the right people when you die. “For those with final salary pensions, complete a ‘nomination of beneficiaries’ form instead,” Valbonesi said.

PLAN FOR UNEXPECTED COSTS

Once you retire, you will turn your pension and other savings into a sustainable income, so plan ahead to make sure it lasts.

“Retirement spending often spikes in the early years, as people travel or pay for their children’s or grandchildren’s education.

“In your final years, you have to make provision for higher healthcare costs.” Valbonesi added that we all need to map out these scenarios, to avoid running out of money during retirement.

‘Combining your pensions into a SIPP should make them

easier to manage and save money’

GIVE LOVED ONES THE POWER

As more people suffer from dementia and Alzheimer’s, it makes sense to plan for the worst by nominating a friend or relative to manage your affairs if you are no longer able to do so, by drawing up a Lasting Power of Attorney. “You should consider doing this while you are still fit and healthy, otherwise it may be too late.the LPA does not come into force until you are no longer able to manage your own affairs,”valbonesi said.

THE SEVEN-YEAR GIFTING RULE

Making gifts to loved ones can cut any future inheritance tax liability, but remember the seven-year rule. If the total value of your gifts is within the inheritance nil-rate band threshold of £325,000, they will not be taxable regardless of when you die.valbonesi said. “However, if you give away more than the nil-rate band and you die within seven years, anything above that threshold may be subject to 40 per cent tax.”