5 useful tips to help you decide when to retire

Category: News & United Kingdom

Some people have a clear idea of exactly when they are going to retire. This may be when they reach a specific age, while for others it could relate to another key life event such as when they have paid off their mortgage or finished putting their children through university.

However, for many others, the decision on a specific retirement age or date is less clear-cut.

If you’re in that latter category, discover some handy pointers that can help you decide when you do actually want to stop working and start enjoying a well-deserved retirement.

1. You have a lot of flexibility around your retirement age

When you retire is entirely down to you, although there are restrictions on when you can actually start drawing from your retirement fund.

For example, the money you have in any UK pension is accessible as soon as you reach 55, although this is rising to age 57 from April 2028.

From an Australian perspective, you can start accessing your super fund when you reach your preservation age, which for most people is age 60.

However, while the accessibility of your pension funds is mandated by government legislation, that’s not necessarily the case for other financial assets.

For example, you may have a substantial investment portfolio, such as an accrued ISA fund, that could give you the freedom to stop working whenever you want. Likewise, you may have a series of buy-to-let properties that you could start to sell, giving you the capital required to fund your retirement.

2. You don’t have to stop work one day and start your retirement the next

The ability to access your UK pension from age 55 (rising to age 57 from April 2028) and your Australian super from age 60 creates valuable flexibility when it comes to deciding when you want to stop working.

Indeed, it’s important to bear in mind is that your retirement doesn’t have to be a fixed event, whereby you stop work on a Friday and then start your retirement on the following Monday.

It’s becoming increasingly prevalent to “phase” your retirement, rather than seeing it as a single moment in time.

Research carried out by Legal & General shows a third of people in the UK over the age of 55 cut down the hours they spent at work in the run-up to their eventual retirement.

There are several advantages of doing this. For example, you’ll put less strain on your retirement fund by retaining an earned income after the time you start to draw from it.

It also means that you’re able to maintain the discipline, social interaction, and routine of working life, while also having some time to start indulging yourself.

You could do this by simply reducing the working hours in your current job or moving into a consultancy role. Another alternative could be to move to a different job, where your experience is useful, particularly in terms of mentoring younger work colleagues.

3. You don’t need to retire at all

Following on from the previous point about phasing your retirement, you don’t necessarily have to completely retire at all.

For example, a Sky News report in May 2023 confirmed the number of people still working in their 70s has increased by over 60% in the last decade.

While this may sometimes be down to adverse financial circumstances making it a necessity, there are many who are happy to consider working with no thought of ever fully retiring. This is especially the case when you consider that you’re able to access your pension or super fund to create income flexibility.

After all, if you’re happy working and still living a comfortable and fulfilling life, there’s no need to stop unless you have concerns about your health.

This could particularly be the case if you own your own business. You may well have built this up from scratch, and so are loathe to totally let go of the reins.

4. Cashflow forecasting can help inform your planning

As part of deciding when to retire, cashflow forecasting can give you valuable insight into your financial position – both at the present time and projecting into the future.

It uses your key financial details along with other data, such as inflation rates and projected investment returns, to help you look ahead and see how retirement at a specific time will look from a financial perspective.

As well as modelling varying scenarios around different retirement dates, it can also flag up any issues that could prevent you retiring when you want, giving you the opportunity to address these.

Regular cashflow forecasting could be useful as an integral part of your financial planning, particularly as you start thinking about when you will want to retire.

5. It’s important to have a plan

One important way you can give yourself the best possible chance of being able to retire whenever you want is to make sure you plan ahead.

By having a robust retirement plan in place, you’ll be able to react to external issues and changes in your personal circumstances effectively, and not be blown off course by unexpected events.

Effective planning can also help you prioritise your pension arrangements and ensure you have the right investment strategy to help you achieve your goals.

A good plan will also include details of what you would like to do once you do retire, and give you the best possible chance of turning any post-retirement dreams you may have into reality.

Get in touch

If you want to talk through your own plans for retirement, and benefit from our expert advice, please get in touch with us.

Please note

The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

This article is for information only. Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of ATO and HMRC legislation, which is subject to change.