Taking Control of your Early Retirement

Planning for your Early Retirement

One side-effect of our increased life expectancy is an increase to the state retirement age. An increased retirement age means you’ll have to wait longer to receive your state pension pot. Many people are looking to retire earlier and are opting to start a private pension scheme so they can enjoy their golden years for longer.

The Private pension age is much lower and can be accessed from 55, rising to 57 from April 2028. Our financial planners can help you with a private retirement plan that outlines how much money you need to invest monthly* to reach your retirement goals.

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Private Pension Planning for your Early Retirement

Early Retirement with Private Pensions

As you reach your later years you may start to think about retirement. Early retirement may feel out of reach, but there are many ways to save and plan for your retirement without having to worry about a state pension. 

There are many ways to plan for your pension. Alongside a private pension, there are additional ways to prepare for early retirement such as investment planning. Our financial advisors offer you tailored private pension advice so you understand tax implications and pension forecast of any choices before you make a financial decision.

How do I Access my Private Pension?

Most private pensions can be accessed from the age of 55 – a significant amount of time before you can access your state pension. Your personal pension provider will have set specific terms that identify when and how you can access your retirement savings.

Many private pension schemes will allow you to access up to 25% of your pension fund as a tax-free lump sum, but careful consideration and planning are required to ensure you take what you need in the most tax-efficient manner to meet your financial goals in retirement.

Can I withdraw my private pension early?

Under some circumstances, it is possible to withdraw your private pension before the age of 55. The terms of these conditions will be part of your private pension scheme. 

You may be able to retire due to ill health which has left you unable to work the last part of your pension’s length – often referred to as ‘medically retired’. This is when your pension scheme allows you to access your pension before the age of 55 because of sickness, disability, and other serious medical conditions.

If you become seriously ill, and your life expectancy is less than a year, you may be eligible to withdraw a tax-free lump sum. 

How do I Access My State Pension?

An increase to the state retirement age means you’ll have to wait longer to gain access to your state pension provision. Many people are looking to retire earlier and are opting to start a private pension scheme so they can enjoy their golden years for longer.

You’re able to gain access to your private pension provision at a much earlier age. Currently, you can access from the age of 55, but this will rise to 57 from April 2028.

*The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.

How we help with your early retirement planning

There are many things to consider when planning your early retirement. The sooner some of these are tackled, the better. Our financial advisors will help you understand the routes you can take to ensure you are financially independent when you retire early.

Pension Planning:

State Pension: State pensions are pension contributions provided by the government throughout your working life. These can only be accessed when you reach your State Pension age at 66 from 2019, and 68 after 2028. Our financial advisors will ensure that you have full access to your retirement pensions when you reach your state pension age.

Private Pension: A private or workplace pension can be accessed before you are entitled to your state pension. These pension savings can be utilised early to ensure that you can achieve financial independence in your early retirement.

There are many ways to access your private pension early, from flexible retirement income, also known as pension drawdown, to pension annuities. Our financial advisors explore every avenue possible to ensure you receive as much money as you are entitled to in a way that will support you through your retirement. 

Financial Management & Planning:

Living costs: Understanding your cost of living is imperative to ensure you can retire early. Calculating your basic income needs allows you to assess the money you will need to survive during retirement. This should be the minimum amount of money you will need to spend each year to survive, forgetting luxuries like holidays. 

Retirement income: Your retirement savings should ideally be enough for you to manage your early retirement. There are many cases where additional income during your retirement is necessary, and many ways to achieve this. Semi-retirement may be an option to explore, especially if you are heavily involved with your job, or are not ready to settle down completely just yet.

Property Planning: 

Downsizing: Your home can be your greatest asset when it comes to retiring early before the normal retirement age. Selling your home for a smaller, cheaper, more manageable alternative can leave you with a substantial amount of money for your retirement savings, and help save money in the long run.

Renting: Another alternative is to rent your current home, or a room, to provide a steady income stream during your retirement. Renting your property, or part of it, through an estate agent can remove a lot of financial stress in your later years. Our financial advisors will help you understand all available options for your home or property.

Planning for Early Retirement with Rhodes Wealth Management

Planning for early retirement can be daunting, even if you’ve already started preparing for it. Rhodes Wealth Management’s financial advisors help you develop a clear-cut strategy that works for your needs to leave you in a comfortable position when you retire early. 

Contact us today to find out how we can help you plan for your retirement.

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