This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice please consult us here at Elmfield Financial Planning in Padiham, Burnley, Lancashire.
When, exactly, should you start that next exciting stage of life – retirement? This is a very personal, often complex decision influenced by many factors. Indeed, there is no single form of retirement. It can look different from person to person.
Below, our financial planners in Padiham offer some ideas to consider, based on our experience, when trying to figure out your retirement date.
We hope these insights are helpful to you. Please get in touch for more information or to discuss your own financial plan with us.
Do you have clear goals?
Knowing when to retire is similar, in some ways, to finishing a major project – like a home extension. It helps to have a clear idea of what you want to achieve before you start, tracking your progress along the way to discern how close you are to the “finish line”.
It can be difficult to know when to retire without a clear idea of what retirement will look like for you. How much annual income do you hope to generate, for example? What kinds of expenses do you envisage in older age? Which family and/or career goals do you want to finish first?
How is your health?
For many people, the career demands can become harder to manage as they get older. Perhaps you have less energy to perform physically demanding tasks, compared to before. Or, maybe a health condition has surfaced (e.g. a bad back) which is leading you to slow down.
One of the benefits of retirement is that it can open up more flexibility for your daily life. You do not need to commute anymore. The strenuous on-site work from your career will likely be gone. There is more freedom for you to spend your energy how you like and when you want to.
On the subject of career, factors in your workplace could also be a driving factor for your decisions about retirement. Perhaps the role has irreversibly changed due to new technology and you no longer enjoy the job. Or, maybe the wider industry is heading in a direction that you do not want to be involved with.
What is going on in your family?
There may be developments emerging with your adult children or other family members which impact your retirement plans. For instance, maybe your son or daughter is about to have a baby and they could use your help with the childcare and school runs.
Maybe you want to be more available to help your grandchildren with private tutoring and hobbies. Or, perhaps someone you care about is struggling with an illness or injury and you want to support them.
With family matters – and career ones too – be careful not to fully base your decisions about retirement on these. After all, babies soon turn into children who go to school and become more independent, thus lessening the need for you to look after them. Also, dissatisfaction in one particular job does not necessarily mean it is time to stop working completely.
However, these factors can each play a role in your overall decision.
Do you have a new sense of purpose?
Retirement can be an emotional time for many people. It can involve a fundamental change in identity. If you are a very career-driven person, for instance, then stopping work can leave some individuals feeling “lost”.
The great news is that retirement does not need to be a “boring” time. Indeed, for many of our clients, it is the best phase of life they have experienced. The key is to try and discover a new sense of purpose and to plan ahead about how you will meaningfully spend your time.
For example, could you devote more efforts to a good cause that you care about, such as a local creative group or a charitable organisation? Maybe you could teach young people about key life skills that you have. You may also learn useful skills from them (e.g. how to use tech)!
Do you want to retire fully or gradually?
If the idea of a complete retirement intimidates you, then have you considered a more “phased” approach? After all, there is no law stating you have to retire entirely on a given date.
Some people might want to slowly reduce their hours and “try out” retirement, before committing to it entirely. Others are eager to get started with retirement and leave paid work behind them. There is no universal route that everyone has to follow!
Do you have enough money?
To start claiming the full new State Penson in 2023-24, you must be at least 66 years old. Also, the Normal Minimum Pension Age (e.g. to start accessing workplace pension savings) is currently 55 – rising to 57 in 2028.
Knowing when to retire is not just based on your emotions, but also your finances. What will your income streams be? When will they start and how much income will these generate?
Working with a financial adviser can help you clarify how sustainable your retirement income is and which steps might be needed to achieve your long-term goals.
Invitation
If you are interested in starting a conversation about your own financial plan or investments, then we’d love to hear from you.
Please contact us to arrange a free, no-commitment consultation with a member of our team here at Elmfield Financial Planning in Padiham, Burnley, Lancashire.
Reach us via:
T: 01282 772938
