FINANCE
SHOULD I DELAY RETIREMENT? If your pension is smaller than you’d hoped it would be, you might be considering postponing your retirement. Deferring retirement could enable you to continue paying in to your pension and hopefully benefit from further stock market growth. Here, we look at the financial impact of delaying retirement. A financial adviser can help you to decide on the best course of action, by considering your personal circumstances.
38
www.platinummediagroup.co.uk
WHAT DIFFERENCE COULD DELAYING MAKE? Delaying retirement by several years could bring significant financial advantages. For example, consider a 55-year old earning £50,000 gross per year, with a £400,000 self-invested personal pension (SIPP), who can choose between retiring next month and delaying for five years.
Our analysis shows that if they are planning to retire at age 55 on half of their current income, or £25,000, they could risk running out of money at age 76. However, if they work until age 60 and reinvest growth within the SIPP, save their excess income and add a one-off £10,000 lump sum to the SIPP, their funds are likely to last until age 92. These calculations are based on pension growth of 5% per year after charges and inflation at 2%.
