Should I delay my retirement?

“Should I delay my retirement?” is a reasonably frequent question we hear at Informed Choice when new clients approach us for retirement planning advice.

A new study by Saga has found that more than half of people between the ages of 50 and 69 delay their retirement due to perceived financial pressures.

Since 2009, Saga has found that 55% of older workers decided to push back their plans to retire. One in six people in this age range have delayed their retirement indefinitely, according to the research.

On the other side of the coin, only 6% brought forward their planned retirement age and retired earlier than originally planned.

There are several possible reasons for these decisions to delay retirement.

Since the global financial crisis of 2007 and 2008, interest rates have been at historically low levels and low gilt yields as a result of quantitative easing have meant lower annuity rates.

This has created challenges for converting pension funds into reasonable levels of income in retirement, causing some to wait for better economic times.

Improved longevity has also stretched out the length of time for which money needs to last in retirement; longer lives require bigger pension pots to make expenditure in retirement sustainable, particularly when price inflation is taken into consideration.

But for many older workers, a good reason for delaying retirement is the availability of work and the desire to continue working.

After all, if you are able to work and enjoy doing so, why would you want to retire?

Since the default retirement age was abolished in 2011, employers can no longer automatically retire their employees once they reach ‘retirement age’, so many are choosing to continue working into their late sixties and beyond.

A shift away from manual labour to service jobs in the UK economy over the past generation means continuing to work at older ages is becoming a lot more viable, regardless of the age-related health issues many of us face.

What should not prompt a delayed retirement however is the unfounded perception that you cannot afford to retire.

What we often find when working with clients is they can afford to stop working now, and our Financial Planning gives them the peace of mind they need to make this important life decision, safe in the knowledge they will not run out of money during their lifetime.

Whether you choose to delay retirement or not, make the decision from a position of certainty, and not from a position of fear about the unknown.

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