Early retirement

Early retirement is a complex decision on which you should get professional advice.

The basic considerations include:

• If you hadn't thought about this before redundancy why not?
  
  
• Your pension size with any company inducements now.
  
  
• Your likely pension size at your normal retirement age.
  
  
• Interest rates now versus normal retirement age.
  
  
• Size of pension income now.
  
  
• Size of pension income over the next 20 / 30 years.
  
  
• Impact of inflation on your income over the next 20 years.
  
  
• Effect of reduction of income on lifestyle now.
  
  
• Impact on lifestyle.
  
  
• What to do with the additional leisure hours.
  
  
• What to do in the next year, 5 years, 5 - 10 years, 10 - 20 years.
  
  
• Availability of alternative employment - full time or part time.
  
  
• Impact on interaction with family, friends and work colleagues.
  
• What training could you find helpful now.

More detail on the financial implication here.

Most of those retiring early are taking advantage of redundancy packages which can include extra payments to cover some of the pension rights you will lose by missing out on ten years of contributions. Even with the most generous terms, it requires careful planning.

The growth of self-employment could have a huge effect on the concept of "retirement". People may wind down their work commitments over a 20 years period rather than just stop turning up for work overnight.

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