With the proposed changes in tax for retirement savings should you retire early?
This is a complex question that needs a number of issues to be taken into account, including:
* Will government have a grandfather clause in the legislation, phasing in the new system? It is likely because changes to taxation for civil servants are being introduced gradually;
* What income would you lose by retiring early? If your normal retirement age is 60 and you retire at age 55 you will lose a lot of income. However, if you are now 59 it may be in your interests to go early. You need to look at loss of earnings, loss of salary sacrifices like car allowances and share options, loss of group life and disability assurance, loss of company contributions to medical aid, loss of greater retirement benefits; and
* Can you retire and move on to another job? Beware of false retirements - the taxman is watching for artificial ways of reducing average rates of taxation.