How Do You Take a Retirement Gap Year? is an article about taking long holidays abroad after working written by Matthew Eaton Independent Financial Adviser.
Matthew Eaton has prepared a checklist below for when considering or planning a retirement gap year.
1.Will this impact my benefits and tax treatment?
For example, 35 years of NIC are needed in most cases to obtain the new state pension in full (currently), so if you are at 34 years one more year of contributions can make a big difference. Government policy on benefits and tax changes often and sometimes subtly. Make sure you take advice.
2. Do I really have the money?
Make sure the income is there for the trip and you are not accidentally eating into a lump sum you may need to rely on later.
3. Am I appropriately covered?
Make sure insurances are suitable for the destinations and activities planned and that your current protection policies are reviewed against your itinerary. Some ongoing policies (such as life assurance) will refuse to pay out if you live outside assigned countries for set periods.
4. Who is looking out for me back home?
Make sure you are legally covered with a new Will and Power of Attorney in case you are out of contact for long periods and decisions are required.
5. What is my financial emergency plan?
The bank of mum and dad is not usually available for retirees on gap years! Ensure your emergency funds can pay for the entire trip and your insurance covers your repatriation if needed!
6. How am I going to pay when travelling?
As covered in our last issue, credit cards have legal protection but debit cards do not. Maintaining your credit score is still important in retirement so make sure your credit cards have auto-payment from a pool of funds for the trip (Internet banking overseas can be difficult). A backup card is important as it is easy to lose cards and very difficult to get new ones overseas.
7. Is letting my property a good plan?
Letting out your property over the period of travel can provide supplementary income. However, tenants can demand that repairs be made (additional expenses), lease terms may not match the period of travel and the tenants may move out early (leaving a financial hole if not prepared for).
Retirees’ circumstances mean they are often healthy and wealthy enough to make the start of their retirement journey something special. Taking the time to make sure your financial circumstances suit your journey ensures you have the best quality of life available to you during your retirement.
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Matthew has 28 years experience in the financial services sector working throughout Somerset from his base in Taunton. Matthew is a keen traveller and his favourite destination to date has been exploring South America. Matthew is an experienced and confident wealth management professional.
How Do You Take a Retirement Gap Year? is an article by Matthew Eaton Independent Financial Adviser
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