During the course of their working career, most people chat to family and friends about what retirement means to them in order to figure out their own future. Often, we look at others and their struggles to either correct our own course – hoping not to end up like them – or mirror those actions to achieve the same success.
One thing I can confirm, after working in the wealth management and retirement planning industry for the past twenty years, is that a large portion of my day still consists in answering questions around retirement. Interestingly enough, regardless of how much money a pre-retiree has or does not have, one question is consistently asked – what happens at retirement?
I thought I would answer some common questions for people who are thinking of retiring:
1. When can I retire?
Although you can retire at any given point, normal retirement age is 65 years as defined by The National Pensions Scheme (Occupational Pensions) Act 1998.
2. When can I start accessing my company pension plan?
As of age 65 years, which is normal retirement age, you have the ability to terminate your company’s defined contribution pension plan and to apply to start receiving a pension payment. If you are fortunate enough to retire earlier, early retirement as defined by The National Pensions Scheme (Occupational Pensions) Act 1998 starts at age 55 and goes through to age 64; however, in order to start receiving a pension payment, you must be completely retired from the workforce and not seeking employment.
3. What happens to my pension plan if I pass away either before or after retirement?
The first thing to do while you are working is to check with your employer and pension plan administrator to confirm what type of pension plan you have (it will either be a defined benefit or a defined contribution) and confirm who is listed as the beneficiary. If you die during your working years, whoever you have listed as the beneficiary will be entitled to that value within your pension plan.
However, if you have retired and are collecting your pension, you will need to understand the type of retirement vehicle you are in to determine whether there is a beneficiary associated with that option, as not all retirement vehicles allow you to nominate a beneficiary. It is important to check with your pension administrator to confirm the type of retirement vehicle you have and also confirm who you have listed as your beneficiary, if this option is available.
Planning for retirement can be nerve-racking. It is not always about the money and whether you are going to have enough – other thoughts surface around the meaning of life. Although that sounds rather philosophical, retirement often comes with reflection on your life and how you plan to appreciate the third and final phase of it.
To learn more about Carla Seely, Vice President of our Pension, Life and Investment departments click here.
75 Front Street, Hamilton
Open Monday through Friday from 9:00 a.m. until 5:00 p.m.