What is the Best Age to Retire from Work?
What is the Best Age to Retire from Work?
Deciding on the best age to retire is one of the most important financial and lifestyle choices you’ll ever make. Life expectancy is increasing and retirement no longer means a complete stop to work. Many people are now opting for phased retirement, which could involve charity work, pursuing passion projects, or even taking on consultancy roles post-retirement.
But what is the best age to retire from work? And does the answer differ depending on gender, financial status, or health? We explore the key factors to consider when planning your retirement age, including how much you should save at different stages of life to secure a comfortable future.
Is There an Ideal Retirement Age?
There is no single “best” age to retire. Your decision should depend on your financial readiness, personal goals, and health.
The state pension age is currently 66, but this is expected to rise to 67 by 2028. However, some people choose to retire in their 50s if they have sufficient savings. Flexible retirement is also a popular choice, with many people choosing to continue working part-time or in a different capacity once they surpass 60 years of age.
When is the Best Age to Retire for a Woman?
Most women in the UK retire at the age of 66, in line with the state pension age.
A woman’s retirement age may be influenced by career breaks taken earlier in life for childcare. As women are expected to live longer than men, they generally need a larger pension pot to sustain a longer retirement. However, lower lifetime earnings due to part-time work or career gaps can make this more challenging.
When is the Best Age to Retire for a Man?
Men in the UK tend to retire at the age of 65, which is earlier than the average woman.
A man’s retirement age is often shaped by their income patterns and pension contributions over time. Men in the UK generally have higher lifetime earnings than women, with a gender pay gap of 7.0% for full-time employees and 13.1% for all employees (full and part-time) in 2024, according to the Office for National Statistics (ONS).
How Much Do You Need to Retire Comfortably?
Your retirement income should be sufficient to cover both your essential and discretionary expenses. According to the Pensions and Lifetime Savings Association (PLSA), the estimated annual income required for different lifestyles is:
- Minimum retirement lifestyle – £14,400 per year for a single person or £22,400 for a couple
- Moderate retirement lifestyle – £31,300 per year for a single person or £43,100 for a couple
- Comfortable retirement lifestyle – £43,100 per year for a single person or £59,000 for a couple
The specific amount you need to save will depend on your target retirement age and predicted outgoings in retirement.
Factors to Consider When Choosing the Best Retirement Age
Financial Readiness
Your savings, pensions, and investments should be able to sustain your lifestyle for between 20-30 years post-retirement. To ensure a stable retirement, you should always maximise your pension contributions while working, and take advantage of investments and savings accounts. You could also consider diversifying your income sources beyond pensions by gaining additional part-time income, for example.
Read our blog on retirement planning advice to help you maximise your retirement funds.
Health
When preparing for retirement, it’s important to plan for potential healthcare costs later in life. Life expectancy is increasing, so your retirement savings may need to last longer than you anticipate. If you retire too early, you may find yourself running out of funds, especially if you require long-term care later in life.
Inflation
It’s crucial to factor in rising living costs and inflation when planning your retirement age. Costs increase over time, which has been only too evident in recent years. According to the ONS, the current rate of inflation (CPI) is 3.0%, which can significantly impact your purchasing power over a 20-to-30 year retirement.
Emotional and Social Wellbeing
Retirement isn’t just a financial decision – it’s a major lifestyle change that can have a drastic effect on your emotional and social wellbeing. Many retirees struggle with the loss of structure and social interactions that work provides. Volunteering and part-time work can help you maintain a fulfilling routine that boosts your wellbeing.
Comprehensive Retirement Planning from Piercefield Oliver
The best age to retire from work is a deeply personal decision influenced by your financial security, health, and lifestyle preferences. While some thrive in early retirement, others find fulfilment in working longer.
It’s important to remember that retirement planning involves much more than just setting aside a portion of your income each month. The key is to create a strategic financial plan that ensures you can live comfortably throughout retirement. A well-crafted financial plan considers various elements, such as your desired lifestyle, expected income sources, everyday expenses, one-off costs, and long-term healthcare expenses.
Speak to one of our professional financial advisers for further help and advice on creating a financial plan for retirement today.
Louise Oliver
Founding Partner
Piercefield Oliver
Frequently Asked Questions
The ideal retirement age varies based on financial security, health, and lifestyle goals. While the UK state pension age is currently 66, many people retire earlier or later based on their personal circumstances.
The Pensions and Lifetime Savings Association (PLSA) suggests that a comfortable retirement requires around £43,100 per year for a single person or £59,000 for a couple, but actual needs vary based on lifestyle.
Key factors include financial readiness, expected retirement income, health, inflation, and social well-being. Careful planning ensures you maintain financial stability throughout retirement.
Due to longer life expectancy, women often need larger pension savings than men. Career breaks for childcare can also impact pension contributions, affecting their ideal retirement age.
To increase your retirement income, maximise pension contributions; explore tax-efficient savings accounts; delay state pension withdrawals if possible; and consider part-time work or investments.