Retirement has often been described as “the longest holiday of your life.” But attractive as that sounds, can you afford to pay for the holiday?
Research by one leading insurance company shows that 69% of people over the age of 50 are concerned about their income in retirement. And with the recent uncertainty surrounding the stock market, plus the planned changes to public sector pension schemes, that figure is likely to increase.
Many people underestimate how much income they will need when they retire. If you’ve been used to having two cars, going on foreign holidays and eating out then it is unlikely that you’ll want to give those up simply because you’ve stopped work. In fact, many people find that their need for income actually increases when they retire. After all, if you’re behind a desk all day, the only money you’ll spend will probably be on a sandwich at lunchtime. Contrast this with how much you spend on a day off.
As worries about income in retirement increase many people are opting to keep working after their normal retirement date, with 1 in 10 of those over 65 now being classed as ‘not fully retired.’ This figure is likely to increase in the future, and there are undoubted attractions to ‘cutting back a bit’ – especially if you enjoy your job. That’s fine if your health stays good, but although people are now living longer, they are not necessarily living longer in good health.
Many people who have their own business argue that “my business is my pension.” Again, that works well in theory – but it assumes that you can sell the business for the price you want at exactly the time you want. With technology changing ever more quickly and more and more businesses losing market share to the internet, relying on your business to fund your retirement can be a high risk strategy.
More than any other aspect of financial planning, your retirement demands careful consideration. From checking on your likely state pension to tracking down any previous pensions you might have to making sure you’re contributing sufficient to your current pension – retirement planning needs to be done thoroughly and reviewed regularly.
If you are in any way worried about your provision for retirement or you’d like advice on any aspect of pension planning, then please feel free to contact us.