The Important Questions to Ask Before You Retire
Choosing the right time to retire isn’t easy. You need to think about health, finances, relationships and personal goals – plus whether you enjoy going to work every day. Without a clear idea of when you might like to retire, it’s hard to plan for big events and things that could make your retirement interesting.
Your finances will play an important part in choosing the right time. It’s now an option to carry on working past your State Pension age (between 61 and 68) and generally most businesses won’t have a compulsory retirement age. That means retirement isn’t about a specific age, but about the lifestyle you want, and that might include working. Ask yourself the following important questions to help you make the right choice about when retirement will be best for you.
What do I want to do when I retire?
Knowing what you’d like to do will help you decide when it’s the best time for you to retire. For example, if you’d like to spend time travelling extensively, you might need to wait and save more in your pension pot. If you’re keen to stay at home and cultivate your garden, you might be able to retire early as your outgoings will be less. Take a look at our Vision Starter Module – it’ll help you work out what you want to achieve.
How much will my lifestyle cost?
Your everyday lifestyle is just as important as your big plans. After retirement, you could be eligible for benefits that reduce your household outgoings, like a free TV licence. Take a look at your current household budget and work out the changes retirement will bring – simple things, like heating the house in the day because you’re not at work, do add up.
How much is my pension currently worth? How much will it be worth?
Speak to your pension provider or financial advisor when you’re thinking about when to retire. They’ll be able to tell you how much your pension is worth and how much it will be worth at different points in the future.
Using this information, experiment (on paper) with putting aside different amounts at different ages to see when the best time to retire will be. You can also work through our Finance module to learn more about providing for retirement – the Finance Taster is a good place to start.
Would I enjoy part time work? Or working in a different job?
Alongside looking closely at your finances, it’s important to remember work isn’t just about the money. Dr Ronald Riggio, Professor of Leadership and Organisational Psychology at Claremont McKenna College, argues being psychologically prepared for retirement is just as important as being financially prepared in his article for Psychology Today. Sometimes retirement feels like the answer to a job we don’t like – but we might love the pace and stimulation of working, in which case a new or part time job might be the answer.
Do I feel ready to give up work?
Your job might also give you important social interaction that could disappear if you retire, from the conversations you have by the kettle to fun nights out with your team. Retiring from work also means retiring from everything associated with work, so it’s important to consider whether you feel ready to leave that behind for a new lifestyle. Our Relationships taster can help you explore some of these ideas.
Contemplate what retirement means to you financially and emotionally, and record your thoughts or contribute to one of our discussion group. Looking at retirement from all angles might bring up more questions, but it’ll also help you make an informed choice about when and how you retire.