December 2023
When I was born, the average life expectancy for a man was 70 years old. A child born today now has a 25% chance of reaching over 100 years old (ONS).
So with people now living longer, the State Pension Age would have to go up to facilitate this. Whilst we can probably all agree that 70 doesn’t seem that old these days, I imagine that a 70-year-old may not want to continue working as much as they did when they were in their 50’s or 60’s.
If you don’t want to retire at 70, you will need additional sources of wealth to enjoy a reasonable standard of living for longer.
Here are a few things to consider when planning your finances:
1) Pensions
A pension is the most tax-efficient method of saving, but it is not the only way of preparing for a retirement that could be the same number of years as your entire working life.
Currently, the standard pension contribution is just 8%, split between employee and employer. This figure has always been too low for most people looking to save.
2) Inheriting
By living longer, your beneficiaries may inherit from you much later. The inheritance could even skip a generation – your children may be in retirement themselves, so your wealth may pass straight to any grandchildren and/or great-grandchildren.
3) Care Funding
Living longer may require more investment in care over time – unfortunately, living longer may not necessarily mean a longer, better quality of life.
Settling these costs could then affect your grandchildren’s ability to inherit, if children themselves are at retirement age.
4) Financial planning
Personal financial plans may require adjustments as you age. Part-time working may increasingly become the norm for those working past retirement age. This may change the way you spend and the way you save. Living longer may also encourage more changes in career or career breaks.
If you need help formulating a plan, our Chartered and Certified advisers can assist you in planning your perfect retirement, no matter how far off into the future it may be.
Please call our experts on 01480 869466 for a free initial, no obligation chat.
