When Can I Retire? — Pensions for UK Citizen & US Residents
When you want to retire—from a financial standpoint—it all depends on the calculation of your financial situation and the type of retirement you want to have. At the very least, you must explicitly break down these questions and compare them to your existing circumstances.
- What do you want to gain from your retirement?
- How much money do you need to exist and simply survive?
- What do you truly want out of retirement?
- How much money do you need to follow your specific objectives, such as hobbies, dreams, vacations, family care, and so on?
On paper, that looks to be simple; you have how much you require. On one hand, you look at all of your assets, and you divide them by the rest of your life.
When it comes to calculating your life expectancy, you must consider your residency or where you are in the world, the type of medical treatment you want to receive, and inflation issues. The place in which you intend to reside will determine the cost of living that you must prepare to incur.
If you choose to spend your retirement in a third country, for example, you may spend less money for the rest of your life than you would in a large nation such as the United Kingdom, the United States, the United Arab Emirates, or another EU member state. In addition, how much money you need to spend on medical care will influence the retirement estimate.
Inflation is the most important factor to consider while planning for retirement. As we all know, a thousand pounds now is not worth a thousand pounds in 10 years, at least not based on the previous 60 or 70 years of inflation. Therefore, you must work backward.
So, in today’s terms, how much money do you need to attain that kind of retirement later in life? This is where a financial adviser comes in, as they have already examined hundreds of customer situations. Watch a video by our CEO and Independent Financial Advisor, Dominic James Murray that discuss about this topic.
The Role of an Independent Financial Adviser
So if you’re not sure, we mean you might have a spreadsheet, you might know exactly how much money you need in retirement, you could even have done some future value and previous value calculations, but a financial adviser will be able to give you an estimate. Whether you reside in New York, London, or the French countryside, we, as financial advisors, have a decent understanding of the types of expenses that people may face throughout their retirement.
When you can retire is entirely up to you, but the more you want to spend in retirement, the longer you’ll need to work; if you plan on having a simpler or inexpensive retirement, you may be able to retire earlier. I would, however, always recommend calling a regulated, qualified, well-reviewed, and transparent financial advisory firm to have an adviser sit down with you and assess your circumstances.
The worst that can happen is that they agree with your situation and calculations, or that they may highlight to you whether you may need to work a little longer, or that you may be able to retire now and not need to continue working.
What about the other side of the equation, asset growth? Okay, so we may look at the future worth of money and the previous value of money, and the financial adviser must calculate how much the assets will improve in value over the next five, ten, fifteen, and twenty years.
Many people will consider five or six percent growth to be a good indicator of how much their pensions are worth. At Cameron James, we like to invest in a portfolio that is more closely aligned with the S&P 500 in the United States, which has averaged a 10% return over the last 30 years. This may be considered a little more aggressive for most individuals, but it does provide a bit of a barometer of the kind of returns that can be generated.
When Will I Get My Pension Payment?
The state pension age has risen to 66 and is expected to grow to 68 between 2044 and 2046, depending on the year of your birth. You were eligible for the former state pension if you achieved state pension age between April 6, 2008, and April 5, 2010.
You will be eligible for the new state pension if you were born after that date. If you were born between April 6th, 1970, and April 5th, 1978, your UK retirement age would be somewhere between 67 and one month and 68 years.
Most pension plans have an age limit for taking your pension, which is generally between 60 and 65. In rare cases, you may be able to claim your pension early. The average age is 55.
If you want to contact Cameron James directly to discuss your own pension transfer needs, please make an appointment using the calendar link below. You may also visit our website if you want to have a brief conversation.