‘Life is a journey.’ It's such a well-known and well-used phrase we're not even sure who first came up with it. But it continues to ring true, as we're all on our own life journey with its changing phases.
Retirement is an increasingly important part of that journey, as we're leading longer and healthier lives. Some of us will even spend more time retired than we did working.
Your needs in retirement will change continuously, making it a journey in of itself. You’ll need to plan for these evolving phases, along with fluctuations in your income and spending. For many, this means a higher income initially, which tapers away over time – requiring some serious cash-flow management.
Delays to your journey
Don’t assume your career must come to an abrupt stop. In 2011, legislation was introduced to stop companies making people retire at 65. Maybe you love your work – or a regular payment in to your bank account.
You can still claim your state pension, or put it off for later and receive it at a higher rate. And you don’t have to pay national insurance. This will all help boost your savings, for when (or if) you’re ready to move to the next phase. You won’t be alone in choosing this plan. There are 1.5million* people in the UK who are working beyond their state pension age (currently 65).
Another popular option is to ease yourself into retirement by going part-time or freelance, or running your own business. Around 32% of those working beyond state pension age are self-employed.*
Would you like to live a luxury lifestyle and travel? Or keep life simple by alternating between home and the local library? Perhaps you’d like this phase to include volunteer work, further study, or caring for grandchildren. Retirement often follows a pattern of busy activity followed by a quieter time, and your finances will have to adapt.
Your health and personal philosophies will shape your lifestyle. But inevitably, your financial situation will have a hand in defining what's possible. If you have a decent pension pot, some carefully nurtured investments, perhaps some inherited assets, and good health – this could be the best time of your life.
Every journey comes to an end. Most people worry about declining health and the possibility of needing costly long-term residential care. But the reality doesn't quite fit with the scare stories you may have heard. Only 15% of people over age 85 in the UK live in care homes**. And the average stay is less than three years***. So, your later retirement may be fuller, and less expensive, than you imagine.
Everyone's journey through retirement is different. We can help you map out and manage your cash-flow for each phase of your journey. Give us a call on 020 3823 8678 if you'd like to find out more.
* Source: Which?
** Source: Age UK – Later Life in the UK