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Planning Retirement Online

Deciding if and when to retire

Part 1
- The Decision is Yours

With the demise of the default retirement age, the decision on if and when to retire is now in our own hands. Our employer can no longer tell us that we have to retire at a certain age based purely on how old we are. Providing we are capable of doing the job, we can work for as long as we like and so deciding if and when to retire is now a personal decision.


Guide to 'When to retire'. Content Links

Clearly it's a big decision and one that we will all need to think about long and hard, based on a number of factors. Once we have made that decision and we have decided that we will retire at a certain age, then planning and preparing for retirement becomes very important. But that's getting ahead of the purpose of this section, which is to provide some help and information on the decision-making process.

What is the Retirement Age?

With the demise of the default retirement age still being quite recent (it came into place in October 2011) many people are still unsure about its implications for them. The situation, as described above, is that employers can no longer force someone to retire at age 65, or any other age, purely on the grounds of age. Therefore, if you are able to do the job satisfactorily, you may retire at any age you wish. There are exceptions and organisations may apply to have an 'Employer Justified Retirement Age (EJRA) but if your organisation has an EJRA they will have told you. So the answer to the question, 'What is the Retirement Age?' is, 'There isn't one.'

However, there is an answer to the question, 'What is the Pension Age?' In terms of an organisational pension, there will be a normal age at which you can take your company pension. Your Pension or HR Department will be able to tell you what that age is and what the rules around it are. The minimum age at which you may take a company pension is 55. For a personal pension, you may specify to your pension provider at what age you wish to take your pension.

The State Pension age is currently 65 for men. Between December 2018 and April 2020 it will rise to 66. For women born after the 5th April 1950 it is currently rising from 60 to 65. This rise began on the 6th April 2010 and will continue until the November 2018. From December 2018 to April 2020 it will rise to 66, in line with the men's age. For more information on this and for a link to the Pension Calculator, which you can use to see exactly when you will qualify for your state pension, go to Direct Gov - State Pensions Calculator

Before we can start to address the issues of planning and preparing for retirement, we need to ask ourselves a fundamental question:

What is retirement?

The term retirement implies complete cessation of work and for previous generations it was often exactly that, with a short period of failing health leading to their eventual demise. However, in our lifetimes it has changed completely. We now view it much more as a reward for a hard working life and see it as a great opportunity. For many of us it currently provides 25 to 30 years of good active life to do exactly what we want. It can genuinely be an opportunity to ‘write our own job description’ for the first time in our lives.

However, it can also be a challenge. How are we going to fill 40 hours or more of extra leisure time, on top of previous leisure time each week?

Of course we don’t have to choose to do no work at all. In fact many people have traditionally continued to do some work, either part time, or very often voluntary work. In most cases this has been outside of previous employment, often doing something completely different or even a portfolio of different things. The removal of the default retirement age is also likely to lead to more people gradually working reduced hours as employers who are able to, offer this sort of flexible working benefit. This is an approach which can benefit the organisation and ourselves alike.

So one of the many questions we have to ask ourselves about retirement is what do we personally mean by retirement? For example: Does it really mean giving up all work for good? What opportunities will it present us with? How can we still feel as if we’re making a contribution to society?

It will mean different things to different people and we have to decide what retirement means to us.

This Guide is written by Retirement Specialist Dave Sinclair supported by members of the LaterLife team. As well as writing on retirement matters Dave is Training Director at LaterLife and responsible for the content and continuous improvement of LaterLife's Retirement Courses.
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