APPROACHING
Choosing your
retirement date
More often than not, your retirement date chooses you rather than the other
way around. External factors such as poor health, redundancy, a windfall or lack
of savings can push back – or forward – the date you stop working.
That said, it is important to have a date in mind, as it
helps you to plan you finances. You should ensure
that, in the case of losing your job in your late 50s or
early 60s, you have planned in some contingency as it
is often hard to find work at that age.
Some people save hard so that they can stop working
their 50s, but the reality for most of us is that we all
have to work until 65 to make ends meet and ensure
we have enough put aside for retirement.
The most important thing to do is work out how
much you are likely to need to live comfortably on
when you retire and what target pension pot you
need to achieve this. The differences are quite wide in
the income you can live on if you buy an annuity as
opposed to living directly off the savings you have
built up.
You should look at the following:
Most people downsize their property, clear all debt and
live a more modest lifestyle in retirement, but it is
worth using the Trustnet Direct calculator to see how
much your chosen lifestyle will cost.
www.trustnetdirect.com/retirement/planningfor-retirement
Key points
You may not be able to choose when you stop
working, so plan some contingency
Access to the state pension and the official
retirement age is rising (see panel below)
Plan carefully as to when you can actually afford
to stop working and maintain a chosen lifestyle
The value of your savings and investments
Other assets, such as property, that you can sell
Your overheads and any debt that needs servicing
How your costs in retirement will differ from
those in your working life
The income and growth you can generate from
your investments and other assets (for
example buy-to-let) in retirement
Your estimated lifespan (plan for living until
you are at least 80)
Page 38
UK retirement age
Now
2020
2028
2030s
2040s
2050s
65
66
67
68
69
70