Would you get the retirement you want and have always dreamed of or would you end up in retirement with what life throws at you? How would you like to retire?
The Office for National Statistics (ONS), which is the UK’s largest independent producer of official statistics once carried out a survey of 100 young people aged 25 a few years ago. I remember feeling nostalgic as I went through their findings. This was way back in 2012. They found that 40 years later in retirement, out of those 100 people; 49 of them would end up being financially dependent on friends and charity, 29 will be dead, 12 will be broke, 5 will still be working, 4 will be financially independent and only 1 will be rich. Only 1 !!!
In summary, 40 years later in retirement, 93% of those who live to retirement, will be depending on family, friends and charity.
Scary isn’t it? Which one will you be? How would you retire? Would you be reliant on charity, family or friends or would you be financially independent?
What is retirement and when is the best time to retire? I personally define retirement as your ‘time of choice’. A time when you choose to do things that are of more interest. It is a time when one decides to withdraw from an active working life. You don’t have to be old & gray to retire, you can achieve retirement when you have sources of income that do not have to be earned by actively working.
Retirement should be a time of ‘financial independence’. You can take your time of choice at 40, 50 or 60; whatever suits you best really. Just make sure you are well prepared, financially and otherwise.
For some people, retirement is a happy time. They set their own schedules, take long vacations and start spending all the money they have been saving. Sadly, for some others, the opposite is their reality.
Granted, a fat paycheck or nest egg at retirement is not the only way to guarantee happiness. There are several other factors that contribute to a happy retirement such as family, good health and peace of mind but have you ever pictured yourself in retirement? Where would you be? Who will you be with? What would your lifestyle be like and honestly, what are you doing about it?
One of the reasons people tend to fail to allocate funds for retirement is because they have a difficult time visualizing what they will be like when they are older. I was taught a few years back by a senior investment adviser, to draw a ‘retirement bubble (or a circle)’ and then create the life I want in retirement in that bubble by simply drawing pictures or writing the things I want in retirement in that bubble. For example; traveling, shopping, golfing, spending time with my spouse or kids/grand kids, a brand new car every three years etc.
Thinking and visualizing about your future self and how you would like your life to be like when you retire is a great way to connect and to encourage saving for the future.
We have all heard the saying those who fail to plan, plan to fail. Even if you are saving already, its important to carry out regular reviews with your financial adviser to ensure that your contributions towards your retirement savings are consistent with your retirement targets and goals. Which brings me to my next point: do you know how much you need to retire on? Have you ever asked yourself how much will be sufficient for me to live comfortably, month after month without relying on the government or my children.
If you have no idea, I suggest you find out as it is very important to take those numbers into consideration when planning for the future. Speak to a financial adviser today and if you have not got one please email me and i would be happy to go through those numbers with you.
You can also have a look at 7-tips-for-stress-free-budgeting/.
Awesome article