Holiday thinking time
We are now in the midst of the holiday season with many packing their suitcases, purchasing their suntan lotion and heading off to sunnier climes. It’s a chance to sit back, relax and let the brain wind down for a week or two, often recharging our batteries after a busy spell at work.
Many of us will also have enjoyed and watched in awe at this year’s men’s Wimbledon Final – what a display of strength and stamina by both Federer and Djokovic, amazing!
This got me thinking of my own bucket list, perhaps because attending a men’s final at Wimbledon is definitely on my to do list, but what else do I want to do? And more importantly, will I have enough saved to make my wish list become a reality? I guess these are important questions for us all, to ensure we can have the lifestyle we truly want when we retire.
The concept of retirement has changed dramatically over the past few years. People are no longer expected to retire at a pre-determined age – some choose to phase into retirement by switching to a shorter working week, whilst others opt for an early retirement.
So, what is the right option for you and how can you plan effectively? We are all different and have varied ideas about what this next stage of life might look like and when it is likely to commence. To begin to answer these questions, some thought is needed to how the next stage should evolve for you as an individual/couple.
A friend recently asked me how much an average person needs to live comfortably in retirement – a tricky question to answer! Research carried out this year by Which suggested that the average household needs around £27,000 a year to meet basic areas of expenditure and some luxury items, with this estimate increasing to £42,000 per year if including long haul travel and a new car every five years.
But are you average? Perhaps you need to consider what your lifestyle has been during your working years. Do you see big changes ahead? What are your plans, hopes, dreams and aspirations for when you stop working up to the point you envisage your lifestyle slowing down?
Will you have enough? A financial forecast can help you answer this, working with a lifestyle financial planner who can map a range of scenarios based around your personal circumstances, for example comparing a phased retirement working reduced hours (e.g. 3-day week) at age 58 then retiring fully at age 65 against working full-time and retiring at age 62.
Comparing the results of different scenarios will help you to visualise the different scenarios and to consider what is the most appealing option for you. It will help you understand whether or not your goals can be realistically achieved, and what additional provisions might need to be considered to allow your dreams to become a reality. Even if this means working a few more years than planned, at least you are in an informed position.
I hope this article has given plenty food for thought, and, if you are reading this whilst sipping on a frozen daquiri on your sun lounger, perhaps you will start to ponder what your own retirement bucket list looks like …….. meantime, anyone for tennis?