We are now in the midst of the holiday season with many packing their suitcases, buying their suntan lotion and heading off to sunnier climes. It’s a chance to sit back, relax and let the brain wind down for a week or two, often recharging our batteries after a busy spell at work.
Many of us will also have enjoyed and watched this year’s men’s Wimbledon final in awe – what a display of strength and stamina by both Federer and Djokovic, amazing!
This got me thinking of my own bucket list, perhaps because attending a men’s final at Wimbledon is definitely on it, but what else do I want to do and more importantly, will I have enough saved to make my wish list become a reality? These are important questions for us all, to ensure we can have the lifestyle we truly want when we retire.
The concept of retirement has changed dramatically over the past few years – people are no longer expected to retire at a pre-determined age, some choose to phase into retirement by switching to a shorter working week, whilst others opt for an early retirement.
So, what is the right option for you and how can you plan effectively?
We are all different and have varied ideas about what this next stage of life might look like and when it is likely to commence. To begin to answer these questions, some thought is needed to how the next stage should evolve for you as an individual, couple and/or family.
A friend recently asked me how much an average person needs to live comfortably in retirement, a tricky question to answer!
According to research carried out this year by Which?, it suggested the average household needs around £27,000 a year to meet basic areas of expenditure and some luxury items, with this estimate increasing to £42,000 per year if including long haul travel and a new car every five years.
But are you average? Perhaps you need to consider what your lifestyle has been during your working years. Do you see big changes ahead? What are your plans, hopes, dreams and aspirations for when you stop working up to the point you envisage your lifestyle slowing down? Will you have enough?
A financial forecast can help you answer this, working with a lifestyle financial planner who can map a range of scenarios based around your personal circumstances – for example comparing a phased retirement working reduced hours (e.g. a three-day week) at age 58 then retiring fully at age 65 against working full-time and retiring at age 62.
Comparing the results of different scenarios will help you to visualise your options and consider what is the most appealing option for you, It will help you understand whether or not your goals can be realistically achieved and what additional provisions might need to be considered to allow your dreams to become a reality. Even if this means working a few more years than planned, at least you are in an informed position.
For me, a recent birthday made me realise that in eight years’ time I will be able to access funds from my pension arrangements.
My first thought was, ouch, how did that happen? I still feel 21 most of the time!
Well, the years pass quickly but, perhaps unlike previous generations, the thought of retirement is no longer filled with images of feet up and a quiet life. It is much more likely to include buying a motorhome and spending several months travelling around Europe, taking flying lessons, running a marathon, going on a yoga retreat or perhaps footing the bill for your grandchildren’s university education! The list is endless.
Whilst I have no desire to hang up my boots (or calculator) just yet, I do feel it is imperative that we all give some thought as to how we want the next stage of our lives to look.
So if, like me, the birthday cakes now have a few more candles than they used to, why not come along to one of our forthcoming seminars where we ask the question, are you on track for the retirement you want? I’ll be sharing some top tips on planning effectively for the next stage of your life.
It’s never too early to start planning. For more information, see https://www.eventbrite.co.uk/e/am-i-ready-to-retire-pre-retirement-seminar-tickets-64176371254?aff=ebdssbdestsearch<Links>
Susan Bennett, chartered financial planner, Thorntons Investments.