Retirement is a whole new chapter in your life. You have worked hard and planned for just this moment. Now it is time to look at your options and decide what is best for you and your family.
When can I retire?
You won’t be eligible for a State Pension until you are 66 (that will rise to 67 from 2021 and 68 from 2028).
However, having your own pension gives you more freedom. Most pensions allow you to take your benefits from the age of 60 (although some allow you to retire early from the age of 50).
If you want to put off your retirement by a few years, you can wait until you are 75.
Tax-free lump sum
Everyone has the option to withdraw a lump sum from their pension fund when they retire. The amount you can take out will depend on the kind of pension you have. The great news is that you get generous tax relief on your lump sum allowing some or all it to be taken tax free depending on the amount.
After you take your lump sum, you can either buy a pension for life (Annuity) or reinvest in retirement (ARFs and AMRFs).
Buy a pension for life (Annuity)
Reinvest in retirement (ARFs and AMRFs)
Most pensions will give you the option of investing some or all of what is left in your pension fund into investment funds that are suitable for retirement. These are called Approved Retirement Funds (ARFs) and Approved Minimum Retirement Funds (AMRFs).
They give you full control over what funds you want to invest in and when you want to withdraw your funds. Unlike traditional annuities you can leave what remains in your ARF to your family members when you die.
However, a word of caution. Between losses on investments and regular withdrawals, it is possible that your ARF could run out before you die.
Use our Investment Suitability Tool to find out more about your attitude to investment risk before you make your decision.