When's the right time to retire?

Deciding when to retire is a very personal choice. Some people can't wait to retire while others are reluctant to give up work. However you feel about retirement, it’s important to think through your options carefully, considering how each would affect your life.

If you’re thinking of retiring early, you need to make sure you’ve built up a pension fund that will be large enough to see you through a long retirement – you may want to increase your contributions. Many people underestimate their life expectancy. You could be retired for 40 years or more!

My retirement planner

Want to check if your plans are on target for the date you want to retire? Or to find out how long your pension money might last once you’ve stopped work?

Aviva can help you get your thoughts together on issues like these. You can use our online tool to help with your calculations. It’s easy to use and only takes a couple of minutes.

My retirement planner

Things to consider

Think about what you want from your retirement

Whenever you’re thinking of retiring, it’s important to think about how much money you’re likely to need to fund the lifestyle you want when you’re retired.

  • Think about how much you need to spend – remember, you might be able to manage on less once you’re retired – and whether you’ve made provision for any unexpected expenses which may arise.
  • You also need to consider how inflation and the rising cost of living could affect your income over the coming years.
  • It’s also important to think about any benefits you could be entitled to receive – including the State Pension. The date you retire could affect these.

All of these issues could have a bearing on when you decide to retire. We can help you to get an idea of how much you’ll have to live on when you retire, and what your regular expenses are likely to be...

Budget calculator

Would part-time work be right for you?

It may be possible for you to continue working while still taking benefits from your pension plan.

If you don't want to give up work completely, you may be able to decrease your working hours – or take up part-time work instead of the job you’re doing now. Some people choose to do this rather than go from full time working to retirement.

More choice on how to take your pension

From April 2015, you’ll have more freedom of choice in how to take money you’ve saved in your pension fund.

  • You’ll be able to take as much of your pension fund as you like as a cash lump sum if you’re aged 55 or more. The first 25% will be tax-free.
  • But if you choose to take more than 25% of your fund as cash you’ll be able to do so, with tax payable on the additional amount at your marginal rate.

You need to think carefully before deciding what to do. It may be tempting to take cash from your pension fund, but taking as much as you’d like could mean falling in to a higher tax bracket that year, or you run out of money during your retirement.

We can help you find out more about your options on taking income from your pension fund:

How do I take money from my pension fund?

Think about tax

Your tax position may change when you retire, but this will depend on your personal circumstances. If you do expect to fall into a lower tax-band when you retire, this might play a part in your decisions about taking cash from your pension fund. You may save tax if you don’t take more than the tax-free amount until after you’ve retired.

We can help you find answers to the question of How will I be taxed when I withdraw money?

You may also need to consider whether your loved ones would have to pay inheritance tax when you die. No-one likes to think about this, but there are advantages to finding out where you stand as early as possible.

Find out more about this: What happens to my money when I die?

The information on this page is based on our understanding of current tax rules, which may change.

If you want to delay your retirement

You might not want to retire as soon as you reach State Pension age, or at the age when you originally planned to stop working. If you’re not ready to give up work, or think you can’t afford to retire yet, you need to let your pension provider know.

If you decide to leave your money in your pension fund for now, there are some important points to consider...

  • If you’re about to retire, or reduce your working hours, you may not be able to carry on making payments into your plan at the same rate.
  • Your money will have the chance to grow, but you should always bear in mind that the value of investments can go down as well as up.
  • If you leave your pension fund invested, charges for managing the fund will continue to be applied whether or not you withdraw money from it.
  • If you decide to use money from your fund to buy a retirement income later, there’s no guarantee you’ll receive the same income which you would now.
  • Delaying your retirement date may affect any state benefits you may be eligible to receive.
  • If you have life insurance under your plan it will come to an end at your original retirement date.

If you already have a pension plan with Aviva

However far or near your retirement date may be, visit our retirement timeline for help with your options.

For further information please call

0800 533 5195

Monday – Friday
9am – 5pm

For our joint protection all telephone calls may be recorded and/or monitored.

If you're new to us

Go to our Pension Portfolio page to find out more about starting a pension.

Contact your financial adviser

Choosing when to retire is a big decision which will affect your financial position for the rest of your life, so it’s important to think carefully before you make any decisions. If you have your own financial adviser, we recommend you talk to them.

Find a financial adviser

If you’d like us to refer you to an adviser, please call us on 0800 533 5195. We’ll put you in touch with an adviser who is not tied to Aviva – and you could get up to one hour free initial consultation. If you want any further advice or services after that, you may have to pay charges.

You could also visit www.unbiased.co.uk to find an adviser in your area. There will probably be a charge for using their services.

What to do now

We can help you make sure that you’ve taken all the necessary actions before your chosen retirement date arrives. Our timeline provides you with some useful pointers reminders.

Your retirement timeline

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