If you are still keen to retire early at 55 and you know the financial impact it may have on you, work through our checklist to get yourself in the best possible financial position.
Start making a regular pension contribution as early as you can – every year counts.
Contribute as much as you can every month – you can add to a private pension (like a personal pension or a SIPP) each month and automatically claim the tax relief.
Make sure you select jobs where your employer contributes generously to your pension (this is free money after all).
Work with a financial adviser to make sure your pension is invested in accordance with growth requirements and risk tolerance.
Find the details of any private pensions (defined contribution ones) you may have from previous employers and transfer them into your main account (although be careful to check you won’t lose any valuable benefits by doing this – the best thing to do is speak to a an independent financial adviser).
Consider how your capital is spread between pensions and ISAs. Moving cash into your pension allows you to claim the tax relief, however, the income and capital gains from an ISA are tax-free.
Maximise passive income-producing investments.
Regularly meet your financial adviser to ensure you are on track to retire at 55.
Knowing you’ve money in the bank is going to make retiring early much easier. Like anything, you’re best to start saving early. Even if you save £600 a month for ten years, without interest, you’d have £72,000 ready for you to dip into when you need it. One of the common ways to fund retirement is by using equity release. We have a calculator that can work out exactly how much equity is available to be released from your home.
Having savings means you can use them to help prop up your retirement if your state pension or workplace pension doesn’t quite go as far as you need.