Facing Retirement

In 2019, there were more than 11.9 million people aged 65 and over in the UK¹, which means many of them have reached retirement. As estimates say there will be another London-sized population aged 65 and over in 50 years², we look at the main preconceptions and realities about starting a new life after work.

Expectations

Running out of money
One common idea about retirement is that it will be financially unviable. Despite having accumulated wealth, people will need to rely on their own assets and might not be able to live a comfortable life also because of high living costs or not having saved enough during work life.

A life-shocking event
Finishing working can be scary for many. People might still be facing some hefty bills or take care of their children’s financial issues. Not to say that it coincides with less energetic years of our lives.

The end of work
Reaching 65 (or more) means we will stop working and earning our well-deserved salary. This could affect our sense of self and purpose in life.

Waste money
Pension freedoms allows many people to access their pensions by 55. This has spurred many to purchase luxury goods including holidays and cars.

Stop investing
Reaching retirement age means I don’t have anything to plan for the future with my
money. People will mostly think about gifting, keep assets in bonds, or cash money in
by selling their homes to finance retirement.

Mistrust in financial services
It has been reported that 43% of older people – almost five million people aged 65 and over – believe they have been victims of scammers. Retirees will keep money in cash and stay away from financial advice professionals. They might not even afford to pay for advice altogether.

Reality

Having enough money
With enough preparation and planning retirement doesn’t have to be a financial hurdle. Retirees won’t need as much money and won’t have to save for…retirement!

A time to enjoy life more
Retirement is a moment to reconnect with oneself, family and friends. And with life expectancy rising, people are investing more on healthier lifestyles. Continue to carry on our favourite hobbies, learn something new everyday – now is the moment to make time our best ally.

A chance to work
Retirement doesn’t have to mean the end of our working life though. Plenty of other jobs, (those we might really enjoy and that serve a noble purpose), are out there to grab. These include non-executive jobs, teaching, or volunteering.

Understanding risk
The freedom of accessing your cash before reaching the retirement age doesn’t mean getting out of control with it. Understanding investment risk gives retirees control of their assets and what are the things they can control. Financial advice here plays a key role.

Keep investing
Going into pension drawdown means people stay invested when approaching retirement and once they’ve retired. Also, the usual investments in bond are not even as safe as before with such low interest rates. Stocks might still play a part in achieving your investment goals.

Financial advice can only help
Financial advice is not just about money. It is about planning for your life and that of your family. Also it is not as costly as many think and can be accessed both online and in person. Only an expert guide can make sure your finances are on track and you can enjoy your retirement stress free!

¹Ageing-better.org.uk ²Age UK