The Cost Of Retirement – Guest Post
According to “The Future of Retirement Life After Work” 2013 HSBC report the average length of time spent in retirement is 18.5 years for men and over 23 years for women, and today most people expect to retire typically around the age of 60. However half of respondents in the HSBC survey are very aware that they are currently not saving enough, with retirement savings expected to last only 10 years into retirement.
According to the US Census Bureau, there are 579 million retirees around the world today and 63% of retirees worry that they do not have enough money to live on in retirement and 70% of those regret not saving more. People do not realize just how expensive retirement is with 38% of retirees admitting that that they had not prepared adequately or at all for a comfortable retirement. Retirees experience a drop in income when they retire, yet many continue to spend just as much, if not more once they have retired, meaning that many do not have adequate money to fulfill their retirement aspirations.
The view that people are not preparing adequately for a comfortable retirement is even more widespread across today’s workers. Around 12% of working age people expect to never be able to fully retire and with people struggling to save in the gloomy economy, it’s having an impact on how parents plan their finances for their own retirement. For example, rather than leaving an inheritance for family members, instead parents are choosing to give large financial gifts and loans throughout their life time to help their children with the dramatic rise in education cost and house prices.
With the world’s population aging and the number of retired people expected to increase to over 1.5 billion by 2050, it’s essential that today’s working population learn from the mistakes made by today’s retirees. Every Individual needs to have a personalized retirement plan with regards to their country of residence, access to state and employer pensions, working history and family situation.
Below are just a few tips on how future retirees can create the best retirement plan so they can fulfill all their retirement aspirations, whether it’s going on lots of holidays a year and traveling the world, buying mobile homes or a brand new car. Whatever way it is that retirees want to spend their money, these simple tips can help make those retirement dreams become a reality.
Start saving early – Even if this a small amount regularly, it will make all the difference and can add up to a significant amount over time.
Don’t spend what you don’t have to – Try to restrict buying unnecessary items. While splashing out every so often is nice, don’t make it a regular thing, try to restrict spending more money for very special occasions.
Get on the property ladder as soon as you can – It’s no secret that getting a mortgage and getting on the property ladder has become more difficult over the years, but the sooner you do, the quicker you’ll stop throwing money away on rent.
Don’t rush into retirement – Many people can’t wait to retire and choose to stop working at an early age. However many people regret this decision with a total of 64% (HSBC survey) of semi-retired people wishing they had worked longer, as many saw work as a positive attribute in their life that keeps the body active. If you do choose to retire early, ensure that you have sufficient funds but also have a plan of how you want to spend your time. The last thing you want is to find yourself bored without enough money to fulfill your retirement aspirations.
Be realistic with your retirement’s outgoings – While many retirees incomes fall, the amount they spend doesn’t. Consider all the things that you want to do in your retirement and whether you can realistically can afford it. It’s also important to account for any other hidden costs that might arise. Spreadsheets of costs are a great way to calculate all of your expenditure and allows you to visually update and see all your outgoings.
Consider your family when you plan your retirement – More than often than not, retirees want to leave their family behind some kind of inheritance or gift. Therefore this is a major factor to bear in mind when planning your finances for your retirement.
This article was written by Laura Harrison. Laura enjoys writing interesting content on finance, business and technology.