Some people want to relax and take a well-earned rest after a busy career. Others see it as an opportunity to travel, spend more time with family or set up a business.
Many people approach retirement with little or no idea how much money they will need or the best way to take an income. Tilney’s financial planners can give you the answers and show you whether you are on track – then create a plan to help you get there. Whatever you want from retirement, one thing is certain – to give you the retirement you want and deserve, you need to plan ahead. Read on to find out how Tilney can help to make your plans a reality.
Four important considerations
Proper planning is essential to achieve the retirement you want. Even so, certain things are often overlooked. There are four considerations that could affect your finances in retirement.
- A long retirement
People are living longer today than ever before. According to the latest research from the Office for National Statistics, the average life expectancy is 79.2 years for men and 82.9 years for women. Of course, many people will live longer than this average as healthcare continues to improve.
This is good news, but it means that your money also needs to last longer. No one can predict how long they will live, but a sensible approach is to plan for at least 20 years of retirement.
2. Your health
It is a fact of life that as you get older your chances of becoming seriously ill increase. You may also have to pay for long-term care at some stage in your life. This can be expensive – the average cost of residential care home fees is more than £38,000 a year (according to Knight Frank, 2017 Care Home Trading Performance Review).
3. The impact of inflation
Inflation pushes up prices and reduces the real value of your savings. Rising prices can be a big problem for retirees, especially those on a fixed income. The cost of living also tends to increase more quickly for pensioners. This is because they typically spend a larger proportion of their income on items that are prone to higher inflation such as utilities, food and fuel.
4. Protecting your loved ones
You may want to protect yourself or your loved ones in the event of a serious illness or early death. It is generally better to set up protection before you retire, as life assurance and critical illness products usually become more expensive as you get older.
How much money do you need in retirement?
This is one of the most common questions our financial planners are asked by their clients. We can show you how much money you may need for the retirement you want – and whether you’re on track to get there.
How much money will you need?
A financial planner can show you how much money you will need to make your retirement plans a reality. They will take into account your expected monthly outgoings and any larger expenses such as yearly holidays or a new car.
Are you on track?
Your financial planner will review your current savings and show you whether or not you are on track to afford the retirement you want. They will forecast your future contributions and tell you if there will be a surplus or shortfall. If there is a shortfall, they can create a plan to help you get back on track.
Explore different scenarios
Your financial planner can run through different scenarios to see how your future finances could look if you change your plans. You can see the effects of moving your retirement forward one year, increasing your annual spending or taking an extra holiday each year. You could also see how inflation or a stock market crash may affect your savings.
For more information about how Tilney can help you plan for retirement, please contact Eleanor Wotherspoon, 07773 951 691.