Retirement Isn’t What It Used To Be…

You can read that quite literally, because people retiring today face a completely different retirement picture to previous generations.

First off, the length of time in retirement is likely to be very much longer than in the past. Longevity statistics show quite clearly that men and women are both living longer than ever. The number of Centurions has escalated rapidly, so “outliers” – those who live for decades after they retire, longer than the average – are becoming more prevalent. You must plan to be an outlier, to make sure you don’t run out of money.

Second, health in retirement is a major factor. As people live longer the healthy years extend and this makes the early years in particular much more likely to be active and this suggests greater expenditure in those early years.

Sadly though the flip-side to this is that some of the years could be ones which require care, which is an even greater expense.

Thirdly, the big brother company pension boom, where previous generations were often given secure final-salary pensions, has all but disappeared in the private sector. More and more people need to self-fund, as the replacement schemes (for example Auto-Enrolment) will not have the same generous level of benefit available from the employer.