What Is the Retirement Age?

What is the retirement age? In the basic sense, the retirement age is the year you’ll stop working and start taking a Pension. However, the specific retirement age can vary depending on your circumstances.

People tend to retire at the state pension age, which is currently 66. This is when the government pays you a pension based on how many years of national insurance contributions you have made.

However, even the state pension age lacks a definitive answer. While it is currently 66, the age could be different by the time some generations get to retirement.

The government plans to move the State Pension age to 67 by 2028 and then 68 by 2046. However, there are also plans to bring this second increase forward to between 2037 and 2039. Even then, the State Pension may not be enough to cover your lifestyle costs, so you really need to consider investing in a Personal Pension or Workplace Pension.

Take the time now and think through your long term goals.

Start by setting a goal, thinking about how much you’ll need each year in retirement and how long you expect to be retired for. You can then determine how much you’ll need to invest each month, for how long, and with what assumed rate of growth from your investment Portfolio. Knowing these things can give you an idea when you can retire.

 If you plan accordingly, it could be the case that you could retire sooner than the State Pension age.You can take your pension from 55. However, you also have to consider that your money could be worth even more when left invested, especially as the effects of compound growth add up when your investment is left for longer.

 So in fact, rather than retiring earlier than 66, some people may look to actually continue working beyond 66 to maximise their eventual retirement wealth. And because investing your salary into your pension is tax efficient, you may want to work a little longer and put as much money as possible away as you approach your retirement.

 When people ask what is the retirement age is, the reality is it is personal to them. You could retire from 55 if you’ve built up a big enough pension, or wait until the typical state pension age which is currently 66. Or, maybe you’ll choose to work beyond that, and remember, the state pension age is changing anyway. Different circumstances and different people will mean that there isn’t one definitive retirement age.

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 goal. If your Pension is invested in a globally diversified portfolio you’ll benefit from growth in the funds in those investments, and ultimately the growth on growth, known as compound growth. Over the long term you’ll build a pension that could help you to retire in the way you want.

Working out your goal is easy. What sum do you need to live off in retirement? How many years of investment contributions and what assumed rate of growth will you need? You could even set up a direct debit to ensure you always pay in a sufficient contribution.

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