The early retirement dream lives on, but at what cost?
Whether lifestyle preferences or circumstances beyond your control are behind your decision to retire early, you’ll need to make a plan to help your retirement savings last, while still enjoying your favourite comforts in life.
In other words, having a plan can give your money the best chance of lasting the distance.
The COVID-19 pandemic may significantly increase the number of people working past traditional retirement age. Equally, stopping work can seem a long way off for younger people already concerned about their future employment landscape. The good news is that the early retirement dream lives on, according to new research.
Escape the daily grind early
A study found that nearly two thirds (60%) of those stopping work in 2019 did so before their expected State Pension age or company pension retirement date.
The study also found that the average expected retirement income for those retiring early, inclusive of savings and State Pension, is £18,567. This compares to £21,961 for those not retiring early.
It appears that those planning to escape the daily grind early felt the most comfortable when it comes to their financial situation in retirement.
- 56% of those with a plan said they feel financially well prepared, compared with 49% of those working towards their expected retirement date.
That’s reflected in the numbers taking professional financial advice:
- 68% of early retirees sought professional advice, compared with 60% of those working until their projected retirement age.
Make the most of free time
It’s encouraging to see that so many of 2019’s retirees were in a comfortable enough financial position to enable them to retire early. Early retirees will be making the most of their free time, especially as the average age of those retiring early is 57.
- 37% plan to take up a new hobby or sport
- 27% will start voluntary or charity work
- 17% are planning a long term holiday or gap year
Looking to unlock an early retirement?
If you’re thinking about early retirement, it’s important to understand what this means to you, and to have a plan to make it happen. What’s more, planning doesn’t stop once you commence your early retirement – you need to be flexible and be prepared to adjust as you move through your life.
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