If your unsure on how we could help you, or just looking for a little help, leave your details and one of the team will call you back for a quick chat.
Call us now on 0161 413 7051
If your unsure on how we could help you, or just looking for a little help, leave your details and one of the team will call you back for a quick, informal chat.
Home > Blog > Pensions > Reasons That Early Retirement Planning Is Important
It’s important to understand the value of early retirement planning, and how financial advice can impact your retirement situation. Here we guide you through what you need to know about early retirement planning and how it can affect your financial goals – especially if you want to quit work sooner rather than later.
According to research reported in the Financial Times, half of UK adults are worried that they haven’t saved enough money to sustain their current lifestyle in retirement.
Some people across the UK have reduced their contributions since the start of the COVID pandemic and now, 34% of full-time workers say the state of their retirement finances is a cause of “significant stress.”
Most worries fall into four categories:
Whilst it’s sensible to think about your future retirement plans, speaking to a financial advisor can help ease your worries and get you started on a retirement plan. There’s no sense in worrying alone with no clear plan. The sooner you get started on your retirement plan the better. And this is especially important if you want to retire early.
While you might have really enjoyed your working life over the years, who wouldn’t want to retire early? Here are 4 of the most common reasons people look to take early retirement:
If you’re experiencing declining health it makes sense to want to stop working sooner rather than later. You might be physically unable to carry on with the job you’re doing or you may be experiencing increased stress due to your job. In any case, health is one of the main reasons people seek early retirement.
Wanting to spend more time with loved ones is another common reason people want to retire early. And we totally get that! Family and friends are the most important thing in the world so it makes sense to want to spend as much time with them as possible. Especially while you’re relatively young and healthy.
Similarly, wanting to dedicate more of your life to the things you truly enjoy doing is another common reason for wanting to retire early. Maybe you love golfing and never get time on the green? Maybe you need time to focus on arts and crafts? Or maybe you’re on the hunt for a new hobby and haven’t currently got the time to learn something new whilst working full-time.
Look, not everyone enjoys their work – and that’s fine! You might have been working in the same industry all your life and you’ve finally had enough. You might have enjoyed your career path at the beginning but the nature of the job has changed. Or maybe you never liked your job and you just needed the income. They are all reason enough to seek early retirement.
FIRE stands for “Financial Independence, Retire Early.” The goal is to save and invest aggressively so you can retire sometime in your 30s or 40s. The FIRE retirement movement started in the USA but has been growing in popularity in the UK. Its main ideas originate from the 1992 book Your Money or Your Life, by Vicki Robin and Joe Dominguez.
Taking early retirement is the goal for some FIRE savers, but for others it’s about having the choice to decide when they work.
Those who use the FIRE retirement method follow four rules:
This could allow you to build up a net worth of 25 times your estimated annual expenses and spending to achieve financial independence.
If you want to retire sooner rather than later you need to have an early retirement plan in place. Here are our tips for getting started.
The first thing you need to do is get realistic about your budget. The money you put away needs to last beyond the typical 20 to 30 years that it would if you were retiring in your mid-60s.
If you plan to retire early, it’s a good idea to have a mix of ISAs, investments and a good pension. This is because if you want to retire early you will need to find another way to fund your lifestyle beyond a pension – which you can normally only access once you’ve turned 55. This is where ISAs come in. We can advise you on whether cash ISAs or stocks and shares ISAs are the best option.
You may have a retirement age in mind and it’s fantastic to set yourself a goal. But you may need to be flexible about this. This is especially true if you’re growing investments to retire early.
Retirement planning can be complicated and incredibly time consuming. Getting help early from a fully qualified advisor could be the key to retiring comfortably and in your chosen timeframe.
If you’re worried about retirement or want to reap the benefits of early retirement planning we can help. We can put together an early retirement plan for you or simply advise you on the things you can do now that will help you once you reach retirement age. Simply give us a call on 0161 509 3466 or arrange a callback and we’ll give you a ring when it’s convenient for you.
Pension Statistics: The Nation’s Biggest Pension Worries
14 November 2023
5 minute read
10 Retirement Planning Questions To Ask Your Financial Adviser
02 November 2023
5 minute read
Hilltop Financial Planning Recognised As Top 100 UK Financial Advisers By FT Adviser For Second Year In A Row
17 October 2023
5 minute read
We just need to take a few more details to understand what we can help you with and when is convenient for us to call you back. Gives you a chance to pop the kettle on ☕
What would you like our expert advice on?
Is there any advice in particular?
Finally, just pop your details here and we’ll be in touch