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5 Reasons For and Against Early Retirement

Retirement is a time in life that we generally look forward to and financially plan towards, to ensure that we can enjoy it to the maximum. Early retirement is a common financial goal for doctors and dentists – but it isn’t for everyone. Here are five reasons for and against early retirement.


This does not constitute advice and advice should be sought in all instances before acting on it.


5 Reasons to NOT retire early

Let’s start with the reasons why you may want to carry on working that little longer.

(1) You might get bored

Sounds unbelievable on paper, but it is one of the main reasons doctors and dentists opt against an early retirement is that they fear boredom will strike. After all, you are driven individuals that aren’t accustomed to sitting still. It’s worth considering what you plan to do with your extra time and if this will leave you feeling fulfilled, or frustrated.

(2) You may have to live with less income

Naturally, depending on how early you retire, you need to manage the prospect of having less income to see you through retirement. You will earn less by sacrificing your salary or business remuneration in those early retirement years where you would have otherwise been earning. This also reduces the amount that you may have put into savings or investments.

You may also need to draw down on your pension earlier, meaning the pension pot would have to spread over more months and years, so utilised a little more economically.

(3) You might run out of money

On a similar notion, you could run out of money. If you pension pot isn’t sufficiently bolstered to account for additional years in retirement, you could find yourself short and needing to then find alternative ways to create an income, such as releasing wealth in family assets – something that may not be a first choice.

It’s vital to discuss any hopes of early retirement with your financial adviser so that they can help by planning your pension savings more effectively, ensuring that you cover a longer period and have a contingency for if you live longer that you expect.

(4) Early pension withdrawal can trigger penalties 

If you release your pension before you are aged 55, it will trigger some hefty tax charges, that are only avoidable if you meet one of these two criteria:

  • You are too ill to work, or if you have a serious illness with a life expectancy of less than a year.
  • You have a ‘protected retirement date’ specified in your pension plan. This right needs to have been granted before 6 April 2006.

If you are aged over 55, then you will be able to access your pension pot and whilst you will be taxed if you withdraw more than 25%, it will be at your normal rate of tax. As before though, it’s vital to leave enough in your pension to cover your entire retirement.

(5) No State Pension

If you retire early, you won’t be able to access the state pension.

State Pension age is gradually increasing for men and women, and now depends on when you were born. It is projected to reach 67 by 2028, meaning you can’t claim until you exceed this age.



5 Reasons TO retire early

As long as the above points don’t put you off and you have your financial affairs in order, these are some of the  very valid reasons to make early retirement a goal.

(1) You can afford to do so

The most valid reason for doctors and dentists to retire early is that you can afford it. You have worked hard your entire life, from the years studying at university, through long hours on call and building your practices, and now it’s time to reap the rewards.

Those doctors and dentists that can retire early successfully and with peace of mind, generally work with a financial adviser through their working life – from graduation to retirement, to ensure that the dream can be made into a reality.

(2) You can still work in retirement

Doctors and dentists often choose to retire from their NHS employment, but continue working in their private practice. Alternatively, you may take on a more consultancy or educational role and only “retire” from your practice duties.

If you are able to keep up some work in retirement, which provides an income, then a partial retirement is attractive to some people.

(3) Work becomes too demanding on your physical and mental health

Of course, working in the medical and dental environment isn’t plain sailing. It has its share of pressures, which can take its toll on your physical and mental health.

If this is the case, opting for an earlier retirement can save you from longer-term health issues that could arise if you keep ploughing on.

All the more reason to work with a financial adviser through your career, so if the pressure starts to mount, your retirement plan can be adjusted to ensure you have enough money to take the early retirement you need.

(4) You can enjoy a more active retirement 

Whilst 40 is the new 30 and 70 is the new 60, there is no getting away from the fact that the later we reach retirement, the less active we feel. Once we finally have time to travel and pursue hobbies, we want to ensure we still have the energy to be able to enjoy ourselves; go hiking, play tennis, golf and play with the grandchildren.

You do only live once, so this is a great reason to plan in that early retirement so you can really live all those experiences and take time for yourself and your loved ones.

(5) You reduce regrets

An early retirement may mean that you can take on those projects, which you may not feel up to if you were a little older; a property renovation, learning a new skill or mastering your favourite sport.

If you career has taken centre stage for all these years, maybe early retirement is your chance to do all those things you never found the time to do whilst practicing.


Retirement planning is key

Whether you opt for an early retirement or decide to stick it out to the bitter end, the key to enjoying yourself when you get there is planning.

Without a plan, you will be paddling up a stream at a time in life where your options to increase your financial position will become more limited.

By working with a financial adviser on a regular basis, it is possible to keep a check on your retirement plan, your pensions and other investments to ensure that you will have enough wealth and income to really make your retirement one to smile about.


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Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.
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