Retirement planning

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Before you retire

No matter what stage you are at in your life, the earlier you plan, the more prepared you will be for the time when you stop working. Although you have to reach state pension age before drawing this benefit, you may choose to reduce the time you spend at work, or retire altogether at any age. 

For most people, personal and workplace pensions may be drawn from the age of 55, although this will increase to age 57 from 6 April 2028. However, you may have other resources available to support a reduction in the time you spend at work.

Alternatively, you might prefer to continue working for many years after your pension becomes available. In this case, you may choose to defer taking pension benefits until later.

It is always wise to check the rules which apply to your specific pension scheme(s) to see how much flexibility you have.

Deciding when to retire

There are many things to consider as you approach retirement. It is good to start by reviewing your finances to ensure your future income will allow you to enjoy the lifestyle you want. The earlier you start thinking about what you’ll need for a comfortable retirement and where your money is going to come from, the more control you can have over that period of your life.

The changes in the retirement landscape mean some people are adjusting their expectations for retirement. Retirement planning will no longer consist of simply putting money aside each month and a one-size-fits-all approach is redundant. But with life expectancy still on the increase, the need to save and plan for retirement is becoming ever more critical.

Broad range of meanings

The concept of retirement, as viewed through the opinions of those currently saving towards it, may have a broad range of meanings. But the reality is that traditional retirement is over, with few now seeing it as a singular event.

The future of retirement is likely instead to see a fundamental change in people’s lifestyles with a growing aspiration to combine work and leisure to help manage the costs of a longer life expectancy.

Generating a retirement income

Those saving for retirement will have different concerns, and require solutions that are different to both those of the past and those offered by the majority of the market at present.

Nor will retirement planning in future simply be a matter of generating a retirement income. The impact of the economic downturn shows how protecting incomes and assets against unforeseen life events, such as periods of unemployment and ill-health, should play a fundamental role in protecting people’s ability to save for the long-term during their working lives.