Concept Capital Group: Retirement Planning
Welcome to the Concept Capital Group blog. When you’re planning your future, you’ve probably considered how much you need and how much you can afford to put away. But when you’re planning your retirement, you should factor longevity.
If you don’t have an accurate estimate of how long you’re likely to live, there’s a risk that you’ll run out of money in your later years. Imagine reaching retirement age and believing your retirement provisions need to support you for 25 years; what happens if you live for a further five, or even ten, years?
Without an accurate picture of your longevity, it’s challenging to ensure you’re sustainably using your pension to create an income that will last for life. Even when you base your calculations on averages, the results can still be misleading. After all, a significant portion of people will outlive the national average.
The UK is seeing record-breaking numbers of people celebrating their 100th birthday. With this in mind, it’s not unfeasible that your retirement provisions will have to stretch for 40 years. If you’re basing life expectancy projections on the retirement length your grandparents had, for example, you could outlive your estimate by some way.
Linking to the above point, research shows many people underestimate how long they’ll live for. It’s a factor that can seriously hinder the ability to effectively plan your income during retirement. The gap between expectations and reality means some retirees may not be making the right choice for them. For example, the research linked the gap with a risk of spending more during the early years of retirement and a reluctance to purchase an Annuity, providing a guaranteed income for life, as they don’t believe it represents value.
While we’ve highlighted exactly why longevity is important when planning your retirement, actually doing it can be somewhat harder. None of us knows how long we’ll live for. This is where financial planning can help you
Concept Capital Group’s goal is to give you confidence in the retirement decisions you make, whether that’s to splash out on a longed-for holiday, treat the grandchildren or indulge in everyday luxuries. Learn more about Concept Capital Group here. Follow Concept Capital Group on Twitter here. Read the latest Concept Capital Group reviews on Feefo here.
