Is it too early to retire? I recently read an article from the over-50s finance provider SunLife. Based on three separate surveys they had undertaken, rather alarmingly, they were suggesting that over three quarters (85%) of retirees aged over 50 feel they retired too early. It also stated that 10% of those surveyed felt they retired too late, leaving just 5% feeling they got the timing right.
The article did not divulge the exact reasons behind these feelings. It did cite the increase to the State Pension Age as a potential contributor. It also implies that perhaps this is primarily down to financial issues. An Unbiased article has stated that the average weekly income for pensioners is £304. This works out at around £15,080 net per year, a similar salary to those on minimum wage. It also cites that 67% of a retiree’s income is generated from a private pension. Of course, these feelings could just reflect a sense that retirees simply miss their working life.
Whatever the reason behind the figures, to me the survey highlights the importance of developing an appropriate plan. This should encompass some key considerations, such as:
- How would you like to retire? – be it fully, or perhaps a gradual process. It is worth noting that many employers are becoming more and more flexible, allowing employees to reduce their hours gradually.
- Consider what your retirement might look like – what would the ideal day/week entail?
- Create a budget – as a starting point it is worth understanding how much you would need to cover those essential costs i.e. bills, food and any outstanding liabilities. Beyond this, don’t forget the fun stuff! Whilst not everything has to come with a cost, do your research and find out how much those extra activities or new hobbies might cost. It’s also worth considering how long these ‘extras’ are likely to continue.
- Understand what resources you have available to support you – this might involve obtaining a state pension forecast and gathering the latest values or benefit statements on any pension or investment policies.
- Familiarise yourself with the pension options available – the government’s Money Advice Service has a wealth of information to get you started.
Of course, if all of the above seems rather daunting, then we are here to help. We would love the opportunity to discuss how our service could assist you in developing and maintaining a retirement plan that works for you.