When do people start considering retirement?
When do people start considering retirement?
With many people living longer, healthier lives than in previous generations, notions of an arbitrary retirement age are less relevant than they were in decades past. While many sprightly 70-year-olds will be just as adept at their jobs as they were 40 years previously, other people may feel they have achieved enough to pay for an early retirement at 50.
Setting up a pension can be one of the most responsible financial decisions you make in your life, ensuring that you will be well looked after during your retirement years, when you are no longer able to work or simply not interested in continuing with employment in your autumn years. Those who start saving for their pension early may not feel any financial pressure whatsoever, whereas those who are unable to start saving until later will typically face higher premiums to achieve the retirement they want - so it makes sense to start saving as early as you are able to.
Even if you choose to retire early, you may not be able to draw funds from your pension, however - with most pensions requiring that you reach the age of 55 before you're able to receive payments. There are certain types of pensions that permit flexible withdrawals on a regular basis while keeping the remainder invested, such as income drawdown pensions.
For those wishing to delay their pensions until later life, new legislation means that you are no longer required to take any benefits by age 75. You have the flexibility to buy an annuity at any time from age 55 onwards. The amount you will receive each year from personal pensions depends on a number of factors, including your health, your pension provider and whether you choose a level or increasing annuity, the latter of which grows with inflation.
In these turbulent economic times, it's perhaps no surprise that people are working for longer and postponing retirement more than ever before, but you don't have to save your retirement until you're old and infirm when you take steps to protect your financial future earlier in life.
When you do decide to retire, you should apply for your retirement benefits several months before leaving your job, to ensure they will be ready and waiting for you when you need them. There may be other services you are entitled to sign up for when leaving employment too, which can make retirement a more appealing prospect - including healthcare benefits and travel fare discounts.
The author of this article is a part of a digital blogging team who work with brands like Standardlife. The content contained in this article is for information purposes only and should not be used to make any financial decisions.
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