Retiring is a huge life event. And the very concept of retirement is changing with phased retirement becoming more common. The way we access our pension is now a lot more flexible, and it’s no secret that in the UK we’re living longer than ever before which means we need to make the right choices.
So you’re now age 50 and you want to wave goodbye to the 9-to-5 grind and retire at age 55. You may think it seems like a pipe dream, but early retirement is achievable – and it’s not only reliant on you picking the winning lottery numbers.
But with a longer retirement ahead of you than previous generations and a greater choice over how you take your pension, planning ahead will help ensure you’re on track to a financially secure future.
There’s a very rough rule of thumb to follow in order to find the magic number for a comfortable retirement. To do this, take the age you started saving into your pension and then divide it by two. This will give you an indication as to the percentage of your pre-tax salary you should be putting aside each year until you retire. Also, don’t forget to include your employer’s contribution to that percentage.
We’ve provided our nine things to consider to boost your retirement finances during your final years in the workplace.
Early retirement planning is identical to conventional retirement planning with one big exception – time. You have less time to achieve your financial goals and more time that your money must last after retiring. What this means is that you have a shortened, accelerated financial preparation phase and an extended, post-retirement spending phase when you retire early.