Every month, more than 10 million people in the UK attempt to squirrel away some money towards their retirement.
Yet how many of us are confident that what we are saving is enough? Will there be sufficient money to retire when we want – and live how we want in later life?
Surprisingly few people are able to answer that question. Although one in four aims to retire at age 60, many simply have no clue what their savings, including their pension, will afford them.
Planning when to retire and how to pay for it can certainly be a daunting prospect.
It is a big step to go from the security of being employed with an earned income to all of a sudden being retired and relying on your savings, pension benefits and other assets you may have built up.
Wouldn’t it be great to actually know that you are going to have enough to pay for the life after work, rather than just keeping your fingers crossed?
It is certainly better to have a full understanding of all the options available to you, in advance of your retirement, so you can make informed decisions and choices.
There is something important to note. Your goals, needs and wants in retirement and later life are unique to you, and that is why it is advisable to have a financial plan in place that is tailored specifically for you.
Everyone’s retirement looks different. In Lifetime’s expert view there is not a ‘one-size-fits-all’ answer to the ‘what age can I retire?’ question that so many people type into the Google search engine!
Clearly it is a topic that is on the mind of so many workers. But you need to know and appreciate the answers to some other key questions before you start seeking the post-working life.
You need to ask yourself just what you want for you and your loved ones when you retire?
- Is it to keep up the same lifestyle that you currently enjoy?
- Is it actually to do more, and, for example, go on two holidays per year instead of one?
- Is it to treat the grandkids on a more regular basis?
- Or is it to do less, wind down a bit and take it easy, with less travelling and more time just spent enjoying the garden and ‘pottering about’?
All of these things need to be taken in consideration – and placed into your planning. Only you will know what you want your retirement life to be. You need to have that knowledge and focus firmly in mind, and if you discover that your money does not stretch to everything you want, then you have some decisions to make.
The usual starting point when it comes to starting a plan for retirement is income and expenditure. However, it can often be difficult for people to envisage what their life will be like in say 10 or more years’ time.
That’s why Lifetime has retirement planning professionals who use specialist software to give customers an accurate picture of what you need to do in order to achieve your plans, and will give you advice on your best course of action prior to, and throughout, your life in retirement.
That ‘financial picture’ will have a comprehensive breakdown of current lifestyle costs, including essential expenditure, debt repayments, leisure activities, holidays, one-off expenses etc. It will also incorporate changes, such as the ending of a mortgage and other expenses, and make relevant adjustments. Various different scenarios can be shown, right up to a customer’s 100th birthday.
Many people say they expect to retire in their mid-sixties, or close to their state pension age. That means that their retirement income could well have to last for 20 to 30 years. It is a fair chunk of your life!
Interestingly, there is a noticeable money gap between retirees who take financial advice and those that don’t. That’s according to a study carried out by a think tank from the International Longevity Centre UK.
The study also found that people who receive advice were likely to be ‘more confident, worry less and are better prepared for retirement’ than those who do not take advice.
Your finances determine a lot of your choices in life. We find that those with a financial plan are much more likely to have the necessary funds to realise their goals and objectives in retirement – and to identify obstacles, if any, that need to be overcome.
People often seek financial advice because of a specific issue, such as a concern over a pension policy, but right at the heart of that need is one overriding thing: peace of mind.
We believe everyone deserves to have someone they can truly trust, to talk to about their money. And be given the right help and guidance to take control of their retirement planning.
