A step by step guide on getting ready for retirement

Reviewed and updated 8 September 2026

The decisions you make in the years before retirement can have a lasting impact on the income you have available and the lifestyle you can enjoy.

That doesn't mean you need to have everything decided years in advance. Starting early simply gives you more time to understand your options, make changes and work out what will suit you best.

So, where should you start? Here are some of the key steps to take when you're getting ready for retirement.

1. Decide when you want to retire

There isn’t a single age when people retire. You might want to stop work as soon as you can, gradually reduce your hours, or continue working for longer because you enjoy your job or want to build up more retirement savings.

Your State Pension age is an important part of the picture. It is currently 66 and is increasing to 67 between April 2026 and April 2028. But you can continue working after reaching State Pension age if you want to.

You may be able to take money from a private or workplace pension before you reach State Pension age, enabling you to retire sooner. The normal minimum pension age (the age when you can access pension savings) is 55 at the moment, but it will increase from 55 to 57 from 6 April 2028 for most people.

Think about the lifestyle you want, how much income you'll need and how long your pension savings may need to support you. Ultimately, it’s all about your own circumstances. Some people will choose to retire early, while others will work for an extra year or two, even on a part-time basis, to boost their finances.

2. Check where your pension savings are invested

If you have a defined contribution pension, your money is usually invested in funds with the aim of growing your pension pot over time.

As retirement approaches, it's worth checking how your pension is invested and whether the level of investment risk still suits your plans. That often means moving everything into lower-risk investments, but it isn't automatically the right answer.

The right approach will depend on how you intend to use your pension. If you are planning to take your pension gradually over many years, for example, you may decide to take a more ambitious investment attitude to hopefully maximise your income.

Check what your pension provider's default investment strategy does as you approach retirement. Make sure you understand where your money is invested and what you intend to do with it.

3. Work out how much income you'll need

One of the most useful things you can do before retirement is work out how much money you're likely to need.

Start by thinking about the lifestyle you want. Your essential costs, such as household bills and food, may be quite different from the amount you want to spend on holidays, hobbies and other things you enjoy.

Pension UK’s Retirement Living Standards can provide a useful starting point. For a one-person household, the latest figures suggest an annual income of around £13,900 for a ‘minimum’ retirement lifestyle, £32,700 for a ‘moderate’ lifestyle, and ‘£45,400’ for a comfortable lifestyle. 

Of course, these are guidelines rather than hard-and-fast targets, and your own spending could be very different. Additionally, the State Pension pays out up to £12,548 a year in 2026/27, which is close to the amount that Pension UK suggest is needed for a minimum retirement lifestyle. 

Once you have an idea of what you'll need, you can compare this with the income you expect to receive.

4. Establish where your retirement income will come from

Next, take stock of the different sources of income you may have in retirement.

Check your State Pension forecast and review any workplace or personal pensions you have. If you have a defined benefit pension, check the benefits you're entitled to and when they can be taken.

Don't forget about other potential sources of income too, such as savings, investments, rental income or earnings if you plan to continue working.

Looking at everything together can give you a much clearer picture of whether your expected income will be enough to support the lifestyle you've planned.

5. Think about how you'll turn your pension into an income

Building up a pension pot is only part of retirement planning. You'll also need to decide how you want to use those savings to provide an income. It's worth exploring your options before you retire so you have time to consider what type of retirement income is right for you.

You have several options for turning pension savings into income. You could take flexible withdrawals from your pension, or transfer all or part of your fund into drawdown to access it as and when you wish. 

For more certainty, you can buy an annuity to lock in guaranteed income. If you choose a lifetime annuity, you will have the reassurance of receiving an income no matter how long you live.

Annuities are playing a key part in the retirement income landscape due to a big increase in annuity rates and income in recent years, with 18-year highs in July 2026. The latest FCA data shows that 100,144 pension annuities were purchased in the year up to March 2026, up 13.2% from the previous year.

Are you approaching retirement and want to explore how you could turn some or all of your pension savings into a guaranteed income? Retirement Line's specialist annuity service can help you understand your options and secure a guaranteed income you can rely on.

6. Look for ways to boost your retirement income

If your projected retirement income isn't where you'd like it to be, don't panic. The earlier you identify a shortfall, the more options you have. Even relatively small changes can make a difference when you have several years to make them.

You could consider paying more into your pension, working for longer, reducing your planned spending or delaying when you start taking some of your pension benefits.

You may also be able to increase your State Pension by filling gaps in your National Insurance record, depending on your circumstances. Check your record and understand whether paying voluntary contributions would actually increase your State Pension before you pay anything.

7. Get your debts under control

Going into retirement with less debt can make it easier to manage your finances, particularly if your income is going to fall once you stop working.

Make a list of your outstanding debts, including credit cards, loans and your mortgage, and look at the interest you're paying on each one.

You don't necessarily need to clear every debt before you retire, but it's important to understand how repayments will fit into your retirement budget. If you have a mortgage, check when your current deal ends and how your repayments could change.

The aim is to make sure your debts are manageable alongside the income you expect to receive.

8. Think about the retirement you actually want

Retirement planning isn't just about pounds and pence. It's also about working out what you want your life to look like when you have more control over your time.

You might want to travel, spend more time with family, take up a new hobby or finally get around to all those jobs you've been putting off. Or perhaps you'd like to continue working part-time, volunteer or start something completely new.

It's worth thinking about the social side of retirement too. Work provides routine, purpose and regular contact with other people, so losing those things overnight can take some getting used to.

Planning how you'll spend your time can make the transition into retirement feel much more positive – and help you make sure your finances support the lifestyle you want.

Give yourself time to make the right decisions

There can be a lot to think about as retirement approaches, from your State Pension and pension investments to tax, debts and the different ways you can create an income.

You don't need to have everything figured out decades in advance. But giving yourself plenty of time means you can understand your options, make informed decisions and avoid feeling pressured into making important choices at the last minute.

And remember, your retirement income doesn't have to rely on just one source. A combination of State Pension, workplace or personal pensions, savings, investments and earnings can all play a part.