Changing when you retire will affect your pension savings, retirement income, tax position and future plans. Whether you're thinking about retiring sooner or working for longer, it's worth understanding how a different retirement date could affect you.
There's no single retirement age that's right for everyone. The best option will depend on your personal circumstances, financial needs and retirement goals.
This information is for general guidance only and does not constitute personal financial advice. Current legislation and your personal circumstances may change.
When can you take your pension benefits?
The age at which you can access your pension benefits depends on the type of pension you have and the rules that apply to your plan.
Some pension plans include a protected retirement age. This may allow pension benefits to be taken at an earlier age than would normally be available.
If you're unsure whether this applies to you, check your plan documents or contact your pension provider. If you have pension savings with more than one provider, you'll need to check each plan separately, as different plans can have different retirement ages and benefits.
If you're thinking about retiring earlier
Retiring earlier may give you more time to focus on family, hobbies, travel or other interests.
Before making a decision, think about:
Whether retiring earlier would reduce the time available to build up your pension savings.
Whether your pension savings may need to last longer and provide income for a longer period.
Whether you'll have other sources of income available.
When you'll be able to receive your State Pension.
How taking pension benefits earlier could affect your income later in retirement.
If you're thinking about retiring later
Working for longer may give you more time to prepare financially for retirement and review your plans.
You may want to think about:
Whether continuing to work supports your financial goals.
Whether you'll be able to make additional pension contributions.
How a later retirement date fits with your future plans.
When you expect to start taking retirement income.
Having more time before you take your pension may affect the value of your pension savings. However, investment performance isn't guaranteed, and the value of investments can go down as well as up., so you could get back less than you’ve paid in.
Other things to think about
Your State Pension
Your State Pension age may be different from the age at which you choose to retire.
If you plan to retire before you're eligible for State Pension, you'll need to think about how you'll fund the period between stopping work and your State Pension starting.
Features and benefits of your plan
Some pension plans include special features, guarantees or benefits. Whether these apply, and the value they provide, can sometimes depend on when you take your pension benefits.
If you're thinking about changing your retirement date, it's worth checking whether your plan includes any features that could be affected and how this will impact your future pension income.
Tax
Taking pension benefits will have tax implications. How much tax you pay will depend on your individual circumstances, and tax rules may change in the future.
If you'd like someone to recommend what may be suitable for your personal circumstances, you should speak to a regulated financial adviser. Please remember that a financial adviser will charge you for providing advice, but they will discuss the cost of this before you use their services.
Scottish Friendly do not provide financial advice. This guide is for information purposes only.
Important information
The value of investments can go down as well as up, and you may get back less than has been paid in.
Tax treatment depends on individual circumstances and may change in the future.
Pension and State Pension rules can change.
The impact of retiring earlier or later will depend on your individual circumstances and the pension arrangement you hold.