The way we work is constantly changing but, with it, the way we retire is also facing changes. The official retirement age is on the rise and, from 2037 onwards, you will have to work until 68. As that age rises, more people will be thinking about how they can plan for the future and at what age they will be able to retire. You may have heard the phrase ‘phased retirement’ recently, but what is it, and could it work for you?
What is Phased retirement?
Whilst traditionally, workers work full-time until retirement age, many people have chosen to begin reducing their hours while they’re in their 50s, often leaving their previous job in order to take on a job with fewer hours. This is the stage in between your career and retirement.
Why do People Pre-tire?
For some people, phased retirement allows them to cut down on the number of hours they work as early as their 50s. However, it means that they are able to financially support themselves without full-time wages until they are ready to fully retire.
For many others, phased retirement is essential as it is not financially viable for them to fully retire yet, even when they reach retirement age. These people will often carry on working past retirement age in order to supplement their pensions. In an ageing country where we are living longer, it seems to be following that we are working for longer, something which phased retirement helps to address.
Could Phased retirement be Beneficial for Me?
There are a number of benefits associated with phased retirement such as:
- Allowing for greater financial freedom, particularly for those who use it to supplement their retirement fund.
- Allowing people to carry on working if they wish to. Many people find their identity in their work, so they find it very difficult to fully retire after working full-time for many years.
- For those who are more financially stable, it also offers the option to start cutting down on work before they reach retirement age.
Phased retirement may be the perfect option for you, depending on your individual situation. However, it is wise to seek out expert advice before making a big financial decision such as this. Our team of expert financial advisors can help you to make the correct decision. If you would like to speak to a member of our team to receive pension advice in Lancaster, please don’t hesitate to get in touch by calling 01524 416872 or by emailing firstname.lastname@example.org and we will be happy to advise you further.