Considering your retirement options?
A lot has changed in the workplace recently, from salaries to the number of staff in the building. But one thing that’s undergone massive changes is the age you get to leave it all behind.
A growing number of companies are now making it much simpler for people to ease themselves gently into retirement from their mid-fifties onwards. Here are some options you may want to consider…
You don’t necessarily have to stop work to receive a pension anymore. So, one increasingly popular route is to opt for semi-retirement. This is one of the easiest options to choose. It offers occupational pensions, allowing you to take all or part of your pension from the age of 55. An added benefit of choosing semi retirement is you can still work for the same employer, just on reduced hours.
Adjusting to retirement can be hard, so pension schemes help you re-adjust to the new life, even if you choose to continue working on reduced hours.
Money purchase schemes allow members to take up to 25% of their funds as a tax-free lump sum from the age of 55 to use as an income. This leaves the bulk of the funds intact so it can still pay your main pension later on.
Employers are not legally bound to offer reduced hours, but a growing number are choosing to sign up to the flexible retirement idea.
By being flexible with the age an employee retires, how long it takes them to retire and the level of work they’ll do leading up to their official retirement, companies get to keep staff on perhaps into their 70s. This gives the employer the benefit of their experience but without having to pay a large salary.
Flexible retirement can not only offer less hours, but also a lower position in the company if your employer agrees to it. So, you can be gradually eased into retirement, giving you a better work/life balance.
However, there are downsides because you’ll still pay tax on your pension. This means if your salary takes a dip, your bank balance could be worse off too.
Thinking of taking flexible retirement? You might have to check with employer first, as some sectors can’t offer it due to nature of the job.
It’s important to remember your employer can’t make you retire before you’re 65 unless it’s justified.
Of course, if you’re ready to give up work and already want to start arranging your leaving party, you can always choose to retire early if you’re 55 or over. If you choose to do this, remember the amount of money you’ll get will be less than if you kept working (unless you’re unwell or unable to work). This is because employers take into account that you’re receiving a pension earlier than expected.
Many of your retirement benefits can be at your employer’s discretion. It’s important to understand the precise workings of your pension, be aware of your true value to your employer, and feel comfortable negotiating the hours and retirement deal best suited to you.
If retirement is something you are considering, then we would like to help you with the many answers you will have. Contact us to book your free retirement planning consultation today.