Pros & Cons of Early vs Late Retirement

Though there is flexibility on when can a person retire, the classic decision on when to retire is a big thing for any person. At some point one might think of having early retirement and enjoy and few people are likely to retire late. Based on preferences and current status one should take the decision. There are pros and cons in both early and late retirements. So on considering these pros and cons one can make things lot easier and plan their future as they wanted.

Here we are presenting you with few of the advantages and disadvantages of early and late retirements based on which one can decide which plan best suits him/her.

Early Retirement
It’s more likely for the people to think of their retirement early to escape and take a break from the stressful work. It is the gift to enjoy life as you realize fitting sooner.

Advantages
• There is a saying that ‘Time is a cunning thief’, we never know when time just flew away. Most of the people might have lot of things in their wish list that has to be done in their life time. Few of them include, like travelling across the world, spending some time in their dream land (can be shores of any sea), spending some quality time with your loved ones and the list can go on. So retiring early will give you required time to fulfil your wish list.

• With the growing age, one would weaken physically. So if anyone is planning to start a new carrier or take up hobbies you never had time for or have some physical and mental activities after retirement, it’s better to take early retirement. Coz, after seventies one would definitely become fragile and dismayed to do anything at that age.

• The earlier you stop working, the earlier you stop paying national insurance contributions, freeing up more money for you to put aside for a rainy day.

Disadvantages
• There will be an age limit to take out the money from your state pension plan. The age limit is 65 years. So until one reaches 65 he/she will not have the benefit to enjoy the funds of state pension. So people who are bit financially poor and counting on state pension plan, it’s a bad idea to retire early.

• Early retirement can leave you with limit funds and reduction of future savings. So go for it only if you have already saved enough to lavishly enjoy rest of your life.

• There are chances of feeling lonely which can effecting the emotional, psychological and social aspects as most of your friends and colleagues may still be working and will have limited time to spend with you.

Late Retirement
There can be number of reasons why one might choose to postpone their retirement. Sometimes, due to lack of savings to support yourself at the age of retirement Or can be that some people enjoy what they do for a living and not yet ready to give it up.

Advantages
• With the increase in number of years of employment you would get additional current income along with the increase in your retirement pension benefits. On a state pension, one would get a 10.4% increase on pension if your retirement is delayed each year. So for fire years of delay in your retirement one would get almost 50% increase which is a very good amount.

• One would get chance to spend and get pampered by your loved ones after your retirement. After all you have spent all your life working hard for your family and earning for them.

• You will be more mentally and physically healthy based on your occupation as working is a good exercise to keep your body and brain active which can keep you healthy in your old age.

• One can sleep much better and have great peace of mind having known that he/she has securely funded and can have more absolute plans as you will have clear picture of your finances.

Disadvantages
• The main disadvantage of a late retirement is that you have less time to enjoy your life after retirement.

• There is no guaranty for life, we never know how long a person is going to live. So there are chances that one can leave all his savings behind without even enjoying them and pass away.

• Being physically strong is one main thing to fulfil your plans. If you spend most of your time working, chances are that you will left with no energy to fulfil your plans after retirements

Contact Scottish Pensions for more information.