Delaying retirement

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People are now living longer which has resulted in many delaying their retirement age. If you are considering delaying your retirement it could increase your chances of a more secure financial future.

There are numerous reasons to delay your retirement, for example, reducing your reliance on pensions and state benefits later in life, as well as extending retirement itself with more time available for travelling or pursuing other interests. Some people are just not ready for retirement when they end their careers.

Steady income stream

Perhaps the most important reason however is so that you may continue to receive a steady income stream throughout your lifetime with no dramatic dips due to market fluctuations or inflation erosion.

Continuing to invest money into your pension gives you all the valuable tax benefits and employer contributions that can go with it. And it means you can retain any guaranteed growth rates if your pension has that benefit.

Significantly more money

To further complicate matters, people may underestimate how long they will live when planning for their retirement. This extra time can provide more options over whether or not you are able to work part-time or continue working full-time after your pension starts.

Your level of income is also likely to impact on when you choose to retire. It may be advisable to delay retirement as much as possible so that you have significantly more money available for savings once you eventually have stopped working. This increased wealth will help if your investments are not performing as well as expected in your run up to retirement.

Planned retirement date

In addition, there are times in life when dramatic events such as divorce or serious illnesses may occur which could affect how long and comfortably you live. You may find that you are unable to work following one of these events, if they happen closer to your planned retirement date then you will need more time available before your income stops.

Depending on your personal situation, by delaying the taking of your state pension allowance it will increase by 1% for every nine weeks you defer. However, you should check that receiving a greater amount in state pension will not impact on other benefits you may receive, such as pension credit.