Do you have a set retirement date in mind? Some people may be hoping to give up work as soon as state pension age hits, but for others, there's no such cut-off point, with many not feeling ready to give up work straight away. Instead, a period of pre-tirement sets in to ease the transition, and it's becoming an increasingly popular choice.
The Class of 2015 study found that 21% of those planning to retire this year didn't feel ready to stop working altogether, a figure that's remained stable since 2011. In fact, 24% have already made arrangements to delay their plans, be it through working part-time (31%), changing jobs to reduce hours (12%), or remaining in their current full-time employment (11%).
Delaying retirement plans became a matter of necessity during the financial crisis, but now, this isn't always the case. For many, opting for a phased retirement is becoming an active choice, because even though more than half (51%) of those scheduled to retire this year would consider working past state pension age to help improve their financial position for later life, this is by no means the sole motivator.
The decision to continue working isn't always a financial one, and in fact, the most popular reason for considering staying in work, according to 57% of respondents, is to keep mentally and physically fit. Plenty of other reasons were cited, too: for 39% it's because they simply enjoy working, 35% said they'd miss interacting with work colleagues, 33% don't like the idea of being at home all the time, and 23% say they would miss having a daily routine.
Many hoping to retire this year are also planning to shun the traditional view of what it means to be retired, with the survey finding that the Class of 2015 are already planning a busy and healthier retirement for when they do give up work. Three in 10 (30%) of those surveyed said they plan to enrol in a course or take up further education, 29% plan to undertake voluntary work, and over a quarter (26%) want to join a club or activity group. Staying healthy is also high on the agenda: 43% plan to undertake more physical activity, 30% want to eat more healthily, 10% plan to reduce the amount of alcohol they consume, and 5% intend to quit smoking.
Stan Russell, a retirement income expert at Prudential, commented: "People's attitudes towards retirement are increasingly optimistic, especially with the new freedom on accessing pension savings that will come into effect this April. The 'Class of 2015' are approaching their later years determined to improve their health, acquire new skills and enjoy themselves.
"The old image of everyone giving up work aged 60 or 65 and becoming a pensioner is a thing of the past. People are seeing the opportunity to stay at work full-time or in a period of 'pre-tirement' as an attractive one – whether it's to boost their pension pots or just to stay fit, healthy and stimulated."
So, are you planning a phase of pre-tirement? It could prove to be a great way to ease gently into retirement, but whatever your reasons, careful planning is key. You still need to make sure you achieve the retirement income that can support your ambitions, no matter when you decide to give up work, and consulting the experts can help ensure you're able to reach your retirement goals.
Hopefully you'll have built up a suitable pension pot by saving throughout your working life, and ideally you'll have an ISA pot to fall back on, too. You need to make sure you can turn those savings pots into a valuable income stream, however, so contacting the retirement specialists well in advance of your retirement date is crucial. If it's time to start the process, consult our no obligation annuity planner to consider your options.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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