10
IF YOU DON’T KNOW WHERE YOU’RE GOING, ANY ROAD
WILL LEAD YOU THERE.
YOU’VE WORKED HARD FOR IT, YOU DESERVE IT AND YOU HAVE EVERY RIGHT TO ENJOY IT – BUT WHAT
IS YOUR RETIREMENT GOING TO LOOK LIKE? WHILST THIS ISSUE CONCENTRATES ON THE NEW FOUND
FREEDOMS ONCE YOU GET THERE, DIY INVESTOR MAGAZINE’S STEVE HAYSOM LOOKS AT THE NEED TO PLAN
CAREFULLY TO MAKE SURE YOU ARE ABLE TO MAKE THE MOST OF LIFE IN RETIREMENT.
It is not uncommon for pensioners
to spend anything up to thirty years
in retirement – and that’s assuming
they work until their seventh decade;
all that globe-trotting, golf and
white-knuckle rides on the Harley
will add up to a pretty penny, so it is
imperative that the DIY investor puts
a plan in place to ensure that they
don’t miss a thing.
Ensuring that your current savings
rate and investment regime are
sufficient to support your desired
future lifestyle is a difficult and
potentially daunting process and even
the most ardent DIY investor may
decide that this is the point at which
it is worth enlisting the help of a paid
financial adviser.
However, there are some
considerations that may inform your
decisions and help you to get your
retirement plan on the straight and
narrow.
WHAT SORT OF RETIREMENT DO
YOU ASPIRE TO?
Your circumstances and aspirations
will inevitably change over time, but
it is important to have an idea of what
it is you’re aiming for, as that allows
you to start to budget for it. Do you
foresee a quieter life or a more active
life than you currently lead?
Do you intend the world to be your
oyster or will you seek the Good Life in
your back garden?
Does retirement mean a merciful
end to the daily commute and re-
acquaintance with the snooze button
or the freedom to pursue the business
opportunity you have dreamed of for
so long?
Only you can answer these questions
and once you can do so you will be able
to work out a broad-brush budget for
the achievement of your ideal post-
retirement lifestyle.
Those seeking a relatively modest,
mortgage-free retirement whilst
generating a small income from
part-time activities and restricting
their travels to an occasional week
in the sun may decide that a pension
pot that will pay you £20,000 a year is
sufficient.
However, those ‘Saga louts’ seeking
to make up for the hedonistic time
they feel cheated of by years of books
and nappies and determined to party
like its 1959, may find that an annual
pension income of £50,000 barely
covers the extreme sports.
Health and longevity will play a crucial
role – those from families that boast
a large number of telegrams from
HRH will have to be extra diligent in
ensuring that they make adequate
provision for a long retirement.
Conversely, those with a lineage
that indicates a propensity toward
long-term illness need to consider
how they will cope with it should the
unfortunate happen —NHS treatment
or private healthcare, family-
dependent or specialist retirement
home?
Then, there is the issue of what you
like would to leave behind? There
have been some high profile instances
recently where wealthy parents
have said that they would like their
offspring to make their own way,
but most of us would like to give our
children some financial assistance –
particularly as the burden of student
debt and raging house price inflation
appear to conspire to make theirs a
difficult lot.
SO, HOW MUCH DO YOU NEED?
There are clearly many variable
to consider – lifestyle, longevity
and quality of life will all influence
the amount of money required in
retirement.
It was once believed that it was
necessary to have invested enough
to receive an in-retirement salary
