Things To Consider When Retiring Before Age 60

The recent headlines suggest that we should forget all ideas of retiring before age 60 and be prepared to work longer in order to build up our pension fund. At present a large majority of people seem to be wholly ignoring this pressure to work longer. In fact, as many as 55% of men and one third of women retire before the state pension age. There are many reasons cited as to why people consider retiring before age 60. Many people just want more free time or have worked for 30 plus years and have had enough. In fact studies suggest that around 10% of early retirement is linked to generous occupational schemes. Whatever the reason, it is important that you consider the implications to your pension before you make the final decision of retiring before age 60.

With the increased talk of pension reforms to address the UK pension crisis it seems likely that these reforms will bring about a reduction in incentives towards retiring before age 60 and an increase in incentives to work longer. As a result it is becoming increasingly important that retiring before age 60 is thoroughly researched.

There is a growing concern that many of the people who have already taken early retirement, either due to redundancy, ill-health or through choice, may not have enough pension provision for their future. You need to know all your pension options to make sure you'll have enough to live on in retirement. Retiring before age 60 is bound to affect both your private pensions and your State Pension, so it is important that you invest time in finding out exactly how they will be affected before you make any decisions about retiring before age 60.

So, What Do You Need To Know About Early Retirement And Your Pension

There are some basic questions you need to address before you consider retiring before age 60, these may include:

Do you know how retiring before age 60 might affect your pension?
Did you receive any information about retiring before age 60 when you initially took the pension?
What type of financial advice will I need to seek in order to learn more about this?

Although you can retire at any age, you can only claim your State Pension from age 60 if you're a woman (gradually rising to 65 from 2010) or from age 65 if you're a man. You need to remember that the earlier you retire and begin to draw from your private pension, the lower your future income will be. Every pension scheme has differing rules regarding retiring before age 60. However it is a standard restriction that you cannot retire and draw benefits below the age of 50 in any of the schemes. It is highly advisable that if you are retiring before age 60 that you thoroughly research your personal pension requirements and restrictions.