What to Do with My Pension at 55 If Not Drawing It
Because of today’s life expectancy, most people will get to 55 and probably still have another 10 years left in them to work, which is great for both your mental stimulation and financial situation. A popular option could be to still withdraw your pension but still also work.
This can just increase your monthly salary or just add to it if you need the extra money. It also gives you the flexibility to lower your hours. It may be a case of your mind still wants to work but your body needs more time to unwind.
And let’s be honest, after working hard for 30 years, it probably would do you some good to take a step back. By withdrawing your pension, whether this is in a lump sum or monthly instalments, you will be able to reduce your hours at work and go into full retirement quite smoothly.
Many individuals struggle with the notion of working 40 hours a week to then going to nothing at all, so having that adjustment period can be extremely beneficial.
It should be noted that if you are taking a lump sum, it can be a cause of concern for the pot running low or running out. There are also taxes to consider. Speaking to a financial advisor can give you the best advice for your personal current circumstances, and what may be the best option for you.
There is also the option of literally carrying on, business as usual. If you get to 55 and think that you are either not ready to retire at all, or need more time to save, then you can just carry on as you are.
You can continue to work, save and contribute to your current pension. There is an age where your pension will be capped and you have to start taking it. This depends on the terms and conditions of your policy, but it is averaged at the age of 67.
But generally speaking, if it is something you aren’t ready for yet, then you definitely have options. Consulting with a financial advisor can assist you with getting the most of your current financial situation.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.