A lot has changed in recent years about the way people plan their retirement. For one thing, you're not automatically booted out of the door when you hit 65 any more. Unless your job involves a lot of physical exertion or putting out fires, you can probably keep working as long as you want. As it turns out, one in three of us is doing exactly that!

Why Continue To Work Past Retirement Age?

There are actually pretty good reasons for carrying on working after you hit the State Pension age. For starters, you can claim your State Pension while you're still working for a nice extra income. The same usually goes for other pensions, too - as long as you've reached the age you agreed with the provider.

If you're getting a pension but still working, you may have to file a self assessment tax return.

How Do I Pay Tax If I Am Over Retirement Age?

Your tax situation's slightly different once you reach State Pension age. You won't be paying National Insurance contributions, but you could still be on the hook for Income Tax. Of course, that depends on how much you're earning from all your income sources. If you're under your Personal Allowance (£11,000 at the moment), no problem. Over that, you can expect the taxman to take a bite.

You could even decide to hold off from claiming your State Pension for a few years. That way, when you do start claiming it, you'll end up with more cash in your pocket each week. Obviously, that's a swings-and-roundabouts situation, since you're not getting your pension every year you defer it. Still, it's worth considering if you don't need the cash right this second.

Can I Start My Own Business After I Retire?

You've got other options than just clinging on at your old job, too. A lot of retirement-aged people are starting to set up their own businesses. Some of them are trying to put something back into their communities. Others are simply living their dreams in a way they never could before. They've got experience, energy and connections the young would kill for, and they're putting them to use. With so many restrictions lifted, you've got more choices now than ever over what to do with your retirement savings. Launching a business might just be the right one for you.

If you've worked PAYE jobs all your life, switching to the Self Assessment system can be a bit jarring. In fact, even if you've used Self Assessment before, a couple of things change after State Pension age. You've got to make sure all your information is up to date at HMRC, or they'll keep charging you National Insurance. All your other income, from work, bank interest or anything else, still counts for tax. Whatever you're doing with your golden years, try to make sure it's doesn't include paying HMRC penalties.

Tax and Withdrawing From A Pension

If you’ve taken part of your pension pot and won’t be taking regular payments from it, and if your pension body can’t give you a tax rebate itself you'll need to use a P55 form to claim back any overpaid tax on the money.

This can happen because when you take a lump sum from your pension, your provider has to apply an emergency income tax code to it unless you show them a P45 for the tax year. Since you generally only get a P45 when you leave a job, not everyone taking money from their pension pots will have one.

If you find yourself in this situation, you can claim a tax rebate using form P55 which is designed to get your repayment to you faster than waiting till the end of the tax year.

The main thing to realise is that there's help available when you're making all these big decisions. Whether you're thinking of deferring your pension or starting your own business, talk to RIFT. We're the experts in getting the best out of your retirement. It's far too easy to pay more than you need to, and you can't rely on the taxman to fix things on his own. Call or email and tell us what your plans are. You'll be surprised how much we can do to help.