Retirement: one long holiday?
Fancy sailing off into the sunset as soon as you hit 65? Then make sure you get your finances shipshape by following these initial three steps.
Coming up to retirement? Download the unbiased.co.uk pre-retirement checklist
As unbiased.co.uk and Legal & General’s recent research shows, a huge number of middle-aged Britons refuse to acknowledge the financial implications of growing old, preferring spending to saving, particularly on holidays. The chances are you WILL reach retirement, so on balance, totally “living for today” just doesn’t make sense. We are not going to win the lottery, final salary pensions schemes are not coming back and our parents may need all their assets to fund their own care in later life so it’s time to put down that holiday brochure and ‘get real’.
“Of course, the earlier we start the better our likely outcomes and increased choices, but those of you who can see retirement on the horizon, can still take action to improve your income”
It’s a misconception that any financial provision for the future is somehow lost if we don’t live that long, because with properly laid plans we can ensure that our assets go to those we wish to benefit. Making a will can also remove those names we would rather not receive a windfall, and with prudent forward financial planning this quite legitimately includes HMRC.
It’s also never too late to change our thinking, shifting focus from retirement dreams to the reality. Of course, the earlier we start the better our likely outcomes and increased choices, and we have known that for years now, but those of you who can see retirement on the horizon, or who would rather not work until age 70, can still take action that will improve income in retirement.
It just takes three initial steps:
- Be more open minded about funding the whole of your life
- Commit to knowing what comes in and what you spend
- Take a little time to understand what’s already in place for your retirement
There is a lot more information available than ever before to help you make sense of your financial world. A financial adviser will help you to get your plans shipshape.
You could still decide not to change anything and rely on the new flat-rate state pension. For women especially this assumes an acceptance that you will work for many more years than you originally bargained for. The new proposed state pension is not great at £144 per week in today’s terms, but you could share your life with someone else, giving the pair of you £41 per day to live on. The new auto-enrolment pension will boost retirement income but this has a lesser effect the older you are.
One thing’s for sure: without your own intervention and planning you probably won’t need a holiday brochure…
About the author
Joss Harwood set up Eldon Financial Planning in 2002. She has always been passionate about providing a service to help people achieve their objectives rather than selling products. She was one of the first female advisers in the UK to achieve Fellowship of the Personal Finance Society with Chartered and Certified Financial Planner status.