When contemplating the most cherished retirement aspirations, visions of embarking on thrilling cruises or savouring leisurely moments often spring to mind. However, a recent survey has shed light on the prevailing retirement objective: attaining a state of financial stability.
According to Legal & General, a huge 94% of Brits say their most important retirement dream is to feel financially secure for the rest of their life.
The survey outcomes indicate that there are a multitude of retirement goals that people hold dear, with a significant proportion of these objectives being intertwined with financial considerations. Consequently, it is unsurprising that securing a sound financial foundation is a paramount concern for the majority as they plan for their retirement.
Based on the survey, the retirement aspirations encompass:
- Cherishing moments with family (90%)
- Ensuring the ability to afford care or assistance as required (81%)
- Having the financial capacity to partake in important family events, such as weddings or the arrival of a new family member (73%)
- Exploring the world through travel (72%)
- Offering financial support to loved ones (69%)
Appreciating the importance of financial security in your later years is undoubtedly a positive perspective. However, the survey findings also highlight that, for some retirees, the reality may not meet their retirement goals as expected.
41% of retirees are spending more than they planned
In a recent Legal & General study, retirees were asked about their retirement experiences. While many are enjoying the retirement lifestyle they envisioned, like travelling and pursuing hobbies, a substantial number find themselves overspending.
Shockingly, 41% of retirees said they’ve needed more money than they expected, with 1 in 5 significantly exceeding their budget. This tendency to underestimate retirement needs is more common among those retiring in their 50s.
Underestimating retirement costs can lead to a less satisfying lifestyle and the risk of running out of savings too soon, creating financial challenges in later years.
With financial worries being the top concern for those approaching retirement, taking control of your finances is essential for retiring with confidence.
5 useful steps that could secure your financial security in retirement
1. Review your pension early
When it comes to planning for retirement, there’s no such thing as starting too soon. Even if your retirement is years or even decades away, taking a close look at your pension now can set you on a solid financial course for your later years.
Understanding the present value of your pension and its projected growth throughout your working years can help you determine if you’re on the right financial track. Spotting any gaps in your plan sooner rather than later provides you with more time to address and rectify them.
2. Decide on your retirement date
Evaluating the worth of your pension is just one piece of the puzzle. To gauge whether you’re saving adequately, it’s crucial to determine the duration over which you’ll rely on your pension for income. Establishing a clear retirement date is a pivotal step in this process.
3. Understand the potential cost of your retirement lifestyle
The lifestyle you desire in retirement plays a pivotal role in defining your pension target and ensuring lasting financial stability. Although circumstances may evolve over time, contemplating how you intend to allocate your time during retirement and the associated daily expenses is invaluable.
Keep in mind that inflation often leads to an uptick in living expenses throughout retirement. Therefore, maintaining your desired lifestyle could prove challenging if your income remains fixed. To address this concern, you might consider strategizing for an income that grows progressively as you progress through retirement.
4. Consider how to prepare for the unexpected
Unexpected financial setbacks can have a profound and lasting impact on your financial well-being, especially during retirement.
Incorporating a financial safety net into your retirement strategy can go a long way in securing your long-term financial stability.
5. Contact a financial planner
Financial security in retirement is the very important for us Brits. So when it comes to crafting a retirement plan tailored to your unique needs, a financial planner can be your greatest ally. If your aspiration is to enjoy financial security in your retirement years, we encourage you to get in touch with us. Our team will collaborate with you to define your pension objectives, outline the necessary action steps, and instil confidence in your financial future.
Taking proactive steps now can significantly enhance your chances of attaining your retirement aspirations, including the assurance of long-term financial stability. We invite you to reach out to us and schedule a meeting to discuss your retirement dreams and how we can help you achieve them.
Please contact us to arrange a meeting to talk about your retirement dreams.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation and regulation, which are subject to change in the future.
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