Yes, you can RETIRE a little bit SOONER!

If you’re just back from holiday and wondering how you can have a permanent life of leisure, we’re here to help! Just follow our expert advice on how to ditch the nine-to-five and retire early

Plan your lifestyle

‘Start by looking at your current incomings and outgoings, then consider how much money you might need on retirement,’ says Jamie Smith-thompson from finance company Portafina. ‘Look at any savings you have and try to work out how much income they’re likely to bring in, and when.’ According to experts, there are three financial stages of retirement. The first is when you’re fit and healthy and want to spend more; the second is when you want to do less and spending drops off; and the third is where you may need care and spending accelerates again. But don’t assume that income needs will be the same during retirement. ‘You may need less money than you think,’ says Fred Vettese, co-author of The Real Retirement (Wiley, £15.99). ‘Make some allowance for long-term care but I wouldn’t get too stingy, as other spending – such as on holidays – is likely to drop off the longer you’re retired. Focus your spending during the good years.’ GET STARTED Plan your retirement income at moneyadviceservice.org.uk/ en/tools/budget-planner.

Pick your pension

The state pension age is rising to 66 in 2020. The good news is you can access your private pension a decade earlier. ‘From the age of 55, you can usually do what you like with your pension, including taking some as a tax-free lump sum, or the whole lot in one go,’ says Jamie. From 2019, if you have a workplace pension, your employer must contribute 3% of your earnings into a pension; ask for an outline of how much you could receive if you were to retire early. If you’re self-employed, consider a stakeholder or self-invested personal pension. Just like a workplace pension, these are tax-free, but when you want to use them as income, you’ll usually need to buy an annuity – a fixed payment system that converts your pension fund into guaranteed income for life. GET STARTED Check for gaps in your pension record. If there are any, make voluntary contributions to boost your pension. Visit gov.uk for more details.

Learn to love budgeting

If the sums aren’t adding up, don’t panic. With your debts, look at ways to pay them off quickly. ‘You can never build up wealth while you’re losing money on interest payments on debts,’ explains Jasmine Birtles from Moneymagpie.com. ‘Switch debts to cheaper versions, particularly 0% credit cards.’ If you don’t do so already, it’s time to budget. When you’re retired and no longer have a salary, you’ll need to know exactly what’s going in and out of your account. GET STARTED ‘Next time you’re out shopping, stop and think: “What would happen if I didn’t buy this?”’ says property and finance expert, and Prima columnist, Sarah Beeny. ‘If it makes no difference to your life, walk away.’

Check your entitlements

Don’t forget to factor in all the benefits you can look forward to at retirement. Free TV licence, prescriptions, eye tests and the winter fuel allowance can slash your outgoings each year. If you are planning to head to the sunshine to live out your retirement, consider transferring your pension to a Qualifying Recognised Overseas Pension Scheme. ‘This means you can invest in the currency of the country you’re going to and enjoy better tax breaks,’ says Kevin White, from financial consultancy firm devere. Visit gov.uk for more details. GET STARTED Companies recognise that older people generally make fewer and smaller home insurance claims. Visit rias.co.uk or ecclesiastical.com.