What do you spend you money on?
Your expenses are likely to change when you retire so the amount of money you have, may not be the same as the amount of money you need. For example, you might not need to spend money travelling to work.
Things like annual train tickets or daily car parking rates can be a big expense. However, some expenses may go up that you hadn’t considered like electricity and heating bills.
Do you have debts?
It’s generally sensible to start your retirement as free of debt as possible as your income is likely to go down. So it’s important to think about what debts you may still have at the age you are considering retiring.
Of course one of our biggest debts tends to be a mortgage, so you need to think about whether this will be paid off. According to research* around 3 million people now expect to still be repaying their home loan after the current state retirement age. Your income is likely to go down when you retire, so any fixed repayments like mortgages will take up a bigger share of it.
*Researched carried out by London & Country Mortgages 11/2018
How can I access my money when I need it
From age 55, the main options for accessing your pension include taking your money as a cash lump sum, a guaranteed income for life and/or flexible cash or income. You can read more about your options in access your pension.
Of course just because you can access your money from age 55, doesn’t mean it is that you have to and it may not be the right choice for you.
Deciding when to retire can be difficult...
You need to look at the whole picture what will be coming in and what bills you’ll still need to pay. How and when to take your pension is one of the biggest decisions you’re likely to make. After all you’ll need to ensure you can support yourself for the rest of your life and this can be a daunting prospect. But you don’t need to decide this on your own.
A financial adviser will look at your likely outgoings in retirement as well as the money you’ll have and can help guide you on when you can afford to retire. They’ll also review your pensions and recommend the options that are right for you.