Can I Afford to Retire?
A common misconception when thinking of retirement is that you can only retire at state pension age – this is not true. There are many options open to you, such as, continuing working past state pension age, semi-retirement, or retiring early providing you have the provisions to do so. However, it should be noted that when you retire, in most cases you will be losing your main source of income, so it is important to first seek independent advice.
How much income will I need?
This varies depending on what outgoings you have. Your household bills could increase due to more time being spent at home, but on the other hand you will no longer have work expenses.
It is often prudent to first make a list of all your essential outgoings such as utility bills, mortgages, and food costs. It is important that your income covers this essential expenditure. The further into retirement you go, the more likely it is your spending habits will change, so you should try to factor this in too.
Where will my income come from and what options are available to me?
Your main source of income in retirement generally comes from pensions, whether this be your State Pension, a personal pension, or a combination of both. Your State Pension is claimed when you reach State Pension age, although you can defer taking it. Your personal pension is usually one you have paid into through employment or privately. Pension rule changes in 2015 have now provided individuals with more control over their retirement plan. Previously the only option available was an annuity, however, with the reduction in gilt yields and the limited number of providers offering them, the most common retirement vehicle has become drawdown. Drawdown allows more flexibility.
If you are unsure if you can afford to retire and would like to discuss your options, please contact us on 01967 806505 or email@example.com to arrange a free 60-minute consultation. Alternatively, you can fill in our contact form and we will get in touch with you.
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