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Your retirement age matters

You need to decide the age at which you would like to receive your pension – your Target Retirement Age (TRA) – and understand how this impacts your investments. Remember, you can decide what to do with your money, and how you take it from age 55 (rising to age 57 in 2028).

Your Target Retirement Age (TRA)

Your TRA is the age you choose to receive your pension, which is important when investing. It affects the final value of your pension savings – the longer you save, the greater your pension savings are likely to be at retirement. It is also used to determine your investment mix in the long-term Lifecycle and Lifestyle investment strategies.

A TRA is not just for those who invest in these strategies. If you are a Freestyle member, you should also have a retirement date in mind so you can make appropriate decisions now about your investment choices and, if you are an active employee, how much you are paying in.

Your Plan’s Normal Retirement Age is a good starting point for your TRA, but you should think about this age regularly, especially as you get nearer to retirement, so you can keep your plans on track.

Setting the right Target Retirement Age

Please see the protected pension ages table to find out the earliest age you can retire. Your TRA is confidential and is not shared with the Company.

Those who are invested in any of the long-term Lifecycle or Lifestyle investment strategies will need to choose a TRA.

When setting a TRA, you should think about the factors that may influence your retirement plans, including:

  • When will your mortgage be cleared?
  • Will you have children at university?
  • Are you in good health?
  • When will you be able to afford to retire?
  • At what age will your State Pension become payable?
  • At what age will your spouse or partner be able to retire?

It is important that you set a TRA that matches the date you want to access your pension. If you set a TRA that is earlier than you plan to receive your pension, your investments will switch to lower-risk funds which could generate smaller returns. Similarly, if you set a TRA that is later than you plan to receive your pension, your investments may not have time to switch from more volatile funds, meaning that you run the risk of being impacted by short term market volatility.

If you would like to change your TRA, you can do so at any time. Please log in to Manage Your Account.

Impact of your TRA on your investments

On retirement, members normally use 25% of their Retirement Account to provide a tax-free cash sum. Most of the Lifecycle and Lifestyle investment strategies have been set up with this in mind so that at TRA, 25% of your Retirement Account is invested in the IBM Money Fund. There are some exceptions to this, such as the Lifecycle to Lump Sum 2020 strategy targeting a higher cash lump sum payout at TRA.

The 'switching matrix' for each Lifecycle or Lifestyle investment strategy illustrates how your retirement savings will be invested in the underlying funds and how the allocation to these underlying funds will change the closer you are to your TRA. Details of all the Lifecycle and Freestyle investment strategies can be found here.

Setting a TRA that matches the date you want to access your retirement savings is therefore very important. Your TRA should take into account your personal commitments and long-term goals so that your Retirement Account is switched at the correct time. 

You can find out or change your TRA by logging into Manage Your Account.

For any other questions about your TRA or Manage Your Account, you can get in touch and we will be happy to help.