What is the retirement age?

Written by
Katie Clarke
Time to read
3 minutes, 17 seconds

The retirement age is the year you stop working and start taking your pension. Your retirement age will depend on your personal circumstances.

People tend to retire at the State Pension age, which is currently 66. This is when the government starts to pay you a Pension based on how many years of National Insurance contributions you have made.

The government plans to move the State Pension Age to 67 by 2028, and 68 by 2046, but there are also plans to bring the second increase forward to between 2037-2039.

The State Pension may not provide enough income to cover your lifestyle costs in retirement, therefore most people choose to invest in a Personal Pension or Workplace Pension.

You can take control of your own retirement age by ensuring you prepare by accumulating a sufficient Pension pot. Set a goal by deciding how much you will need per year in retirement, and how long you expect to be retired for.  Through this you can calculate how much you’ll need to invest each month over a specific period to achieve your goal. Financial advisers can also help you in trying to determine how much you would require in retirement and whether you are currently on track to achieve that goal.

If you plan accordingly, you could retire sooner than the State Pension Age (currently age 66).

You can take your Personal or Workplace Pension from the age of 55 (this is due to the increase to age 57 in 2028), but you should consider how much more your money could be worth if you left it invested for longer.  Some people look to work beyond 66 to maximise their retirement wealth. Investing part of your salary into a Pension is tax efficient, so you may want to work a little bit longer to put more money away. Additionally, the longer you leave your money invested, the more you could benefit from

To conclude, there isn’t one definitive retirement age, it is totally dependent on your own personal circumstances.

The Normal Minimal Pension Age (NMPA) is the minimum age you need to be in order to withdraw/use your pension. This was introduced in 2006 and was increased from age 50 to age 55 in 2010. In 2014, following the consultation on ‘Freedom and Choice in Pensions’, the government announced it would increase the NMPA to age 57 in 2028 to coincide with the rise of the state pension age to 67.

At the moment, the age you could start receiving your State Pension (if you’re eligible), is 66 but we do not know how long the State Pension Age will remain at 66 and we cannot be sure that the State Pension will be around forever.

You could choose to work beyond 55 or 66, until you’re ready financially and personally. Whatever age you want to retire at, there is one universal truth, you need to act today to live comfortably tomorrow. It is actually quite simple, you just need to set a goal, and then invest regularly to close your gap to said goal. If your pension is invested in a globally diversified portfolio you could benefit from growth in the funds in those investments, and ultimately the growth on growth, known as compound growth. Over the long term you could build a pension that could help you to retire in the way you want.

True Potential Wealth Management offers restricted financial advice. Our service is specifically designed for clients wishing to access their financial affairs online. With investing your capital is at risk. Investments can fluctuate in value and you could get back less than you invest. Tax rules can change at any time. Please be aware that this communication should not be considered as financial advice.

True Potential Wealth Management LLP is authorised and regulated by the Financial Conduct Authority.  FNR Number 529810.  Registered Head Office: Newburn House, Gateway West, Newburn Riverside, Newcastle upon Tyne, NE15 8NX. True Potential Wealth Management is a Limited Liability Partnership. OC356611.

 

 

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