Retirement is a defining phase in later life, and a benchmark point for the working population. But no two retirements are the same, and there are various factors that underpin someone’s ability to do so.
What is the Average Retirement Age?
The state pension age has undergone a change in recent years, now being based on your date of birth. This is because the state pension age is rising, and due to the cap at 68 in 2028. But state pension is only a small part of a larger equation when it comes to retirement readiness. What else should you be considering?
While the state pension age is currently 66 and rising, the average retirement age for UK workers is in fact much earlier. According to recent statistics, the average retirement age amongst those already retired sits at around 59.
However, trends appear to be shifting, as growing economic crisis and widespread financial instability – coupled with the projected increase in state pension age – leads would-be retirees to delay their plans. As it stands, a fifth of current retirees expressed regret at retiring as early as they did.
These statistics should not greatly inform your own choices when it comes to retirement, but can exist as a good benchmark. This is especially true when it comes to the next consideration on your list: your finances.
Evaluate Your Finances
The principal factor in any retirement plans should be your current financial situation. While you may have a generous pension plan – as well as state pension – in line for your retirement, it is your prior finances that can help secure the quality of life you would like to achieve in retirement. In particular, your savings will play a major role in your post-retirement comfort, being the pool from which you justify larger expenditures on your hobbies and quality of life.
An emergent movement amongst workers in both the UK and the US, called FIRE (Financial Independence, Retire Early), explores methods of maximising savings and investments in order to achieve an early retirement with guaranteed quality of life. If your savings are a little thin on the ground, you may need to continue working – and some lessons from the FIRE movement could prove useful in boosting your savings.
Alternative Financial Opportunities
Lastly, even if your existing financial situation precludes you from retiring before state pension retirement age, there are financial methods of bringing your retirement forward. One strong method is that of equity release, wherein eligible homeowners over the age of 55 can apply for an equity release mortgage to access the value of their property without selling it. This allows retirees to access profits from the housing market without forfeiting property.
Alternatively, the outright sale of a property can be a key way to unlock burden-free funds for an easy retirement. Downsizing to a smaller home or retirement flat allows you to maximise your savings from the sale, and enjoy a higher quality of life.
