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When is the best time to retire?

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Retiring is one of the biggest decisions you can make and not one that should be rushed into, but when is the best time to retire? You may wish to consider a number of factors – physical and mental, as well as financial – before deciding.

Knowing when to retire

There is no single age when everybody should retire. While many people go by the State Pension Age, which is 65 for men and rising to 65 by 2018 for women, this may not be suitable for everyone. Some people may want or need to retire before this age, for physical or mental reasons, while others may feel able to carry on working a lot longer.

When is the best time to retire? There are a number of factors to think about… 

David Sanders, emeritus professor of psychology at Sunderland University, says: “I wanted to go on past 65 if that was possible, but then two things happened at about the same time – I had a minor stroke and the university announced a voluntary redundancy scheme. I believe it’s called a no-brainer in modern parlance.”

Generally speaking, unless you are retiring for medical reasons, the earliest age you can retire is 55, although this varies from scheme to scheme, and there will likely be a knock-on effect on how much pension you will receive.

Getting your finances in order

Being able to support yourself in retirement is one of the most important things to consider. When looking at whether you are ready and able to retire, you should consider whether your retirement income will let you lead the kind of lifestyle you want.

As part of your retirement planning, work out a retirement budget, including any rent or mortgage you might have outstanding, insurance and utility bills, food and drink, your phone, TV and internet package and other outgoings, like savings or holidays.

Retiresavvy member and blogger Julia Skinner says: “I was adamant that a lack of money should not change our lives too dramatically once we were reliant on pensions. If we were not going to have the money to pop out for coffee and cake during the week, I would not retire!”

Get a statement from your pension provider about how much you can expect as retirement income, and remember, if you retire before your pension scheme’s normal retirement age, find out what effect this might have on your income. Think about other sources of income, such as the State Pension and any savings and investments you might have – these will all help you to decide when the best time to retire is.

Is semi-retirement the answer?

On retirement, the sudden transition from full-time work to hopefully a life of leisure can be a shock to many people’s systems. The ‘retirement blues’ – a feeling of depression or emptiness as a result of leaving work – can be a real problem for some people.

Semi-retirement – working part-time or setting up your own business – can help alleviate these issues, as well as providing a source of income. You might also want to consider voluntary work or taking up an absorbing new hobby to occupy your time.

Julia adds: “Retirement should be regarded as the next episode of your life, not an end, and it should not be dictated or dominated by finance, anymore than your years prior to leaving paid employment were.”

The best time to retire is when you feel ready, and when you have the funds to live the life you want.

This article has been commissioned by retiresavvy and any opinions voiced are the author's own.

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