Planning for your eventual retirement will be one of the biggest life decisions you will ever make and the steps you take now will dramatically impact your standard of living later on in life.
With life expectancy on the rise and the cost of living continually increasing, the importance of adequate retirement savings cannot be overstated. It’s not merely about setting aside money; it’s about ensuring that you have the means to maintain your lifestyle and enjoy your later years without financial strain.
Retirement planning is not just about setting aside money; it’s about securing your future, maintaining your standard of living, and enjoying the later years of your life without financial stress.
One of the primary reasons for retirement planning is to ensure financial security during your non-working years. Retirement often comes with a reduction in income, as you no longer receive a regular paycheck from employment. Without adequate savings and investments, you may struggle to meet your daily expenses, cover healthcare costs, or indulge in activities you enjoy.
Retirement should be a time to relax and enjoy life, but this can only happen if you’ve planned for it effectively. By saving and investing wisely throughout your working years, you can maintain your desired lifestyle even after you stop working. Whether it’s traveling, pursuing hobbies, or spending time with loved ones, having a financial cushion allows you to enjoy retirement to the fullest.
Having adequate funds to cover potential healthcare costs, which can become more regular and problematic as one grows old. Reducing the dependence on Government benefits or solely avoiding planning due to the expectation of Government support is simply not sustainable. Government regulations and changes to existing benefits are almost certain nobody can be sure what help or benefits they will be entitled to.
It can often be that peace of mind is the most significant benefit of retirement planning. Knowing that you have a comprehensive plan in place to support you during retirement allows you to focus on other aspects of your life without constantly worrying about finances.
Retirement living standards
The Pensions and Lifetime Savings Association has suggested three Retirement Living Standards – minimum, moderate, and comfortable – based on research by Loughborough University.
Minimum – your basic needs are covered, and you have some money left over for non-essentials. On a single person basis this would require a pension of £14,400 per year and a couple basis this increases to £22,400 per year.
Moderate – you have more flexibility and financial security than if you were at the minimum standard. On a single person basis this would require a pension of £31,300 per year and a couple basis this increases to £43,100 per year.
Comfortable – you have more financial freedom and can afford some luxuries. On a single person basis this would require a pension of £43,100 per year and a couple basis this increases to £59,000 per year.
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At Nelsons, we understand the importance of retirement planning, and we’re committed to helping you shape your future according to your aspirations. Whether you’re just starting your career or approaching retirement age, it’s never too early or too late to begin planning for a secure and fulfilling retirement. Let’s start the conversation today and ensure that your retirement is exactly how you envision it.
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Dylan Jones is a Paraplanner in our expert Investment Management team, specialising in retirement planning and investment strategies.
For advice on or further information concerning the subjects discussed in this article, please contact Jack or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.