Everyone’s idea of retirement is different. Some want a simple relaxing life, others want to enjoy life and travel the world, and yet others want to take part in expensive hobbies and enjoy the luxuries of life like upgrading their homes. A fourth option is the sobering reality that they will have to continue working as they can’t afford to retire.
Retirement is a very personal and complex issue, and for many being a pensioner is still very far away, and it’s difficult to visualise what retirement would be like. To be able to plan correctly, you need to know what kind of retirement you want.
How can you plan for how much you will need if you do not know how you want to live in retirement?
Do you…
- want a simple retirement? You live in a paid-up house and enjoy gardening, reading and and spending time looking after the grandkids. You enjoy cooking and don’t eat out much. Once a year you take a vacation. You have a small group of friends you see occasionally.
- want it all? You want the glamorous lifestyle you dreamed of. You are members of the country club and are avid golfers and tennis players. You eat out frequently and entertain a lot. A couple of times a year you take overseas vacations. You even have a holiday home in Spain.
- want a passive income? You enjoy spending time with the family. Your home is very large, and you’ve decided to subdivide and rent out part of it for a passive income. You also own a holiday home in Portugal that you and family visit often and rent out the rest of the time. The extra income from rentals allows you to travel often and spoil your children and grand kids. You lead a comfortable retirement but can afford to splurge every now and then if you so desire.
Or do you see yourself in this situation…You have a small work pension and private retirement annuity. It is not enough to support yourself during retirement. You had to sell your house and downscale significantly. You deferred your state pension for a few years to get more out eventually, and you continue to work as well for a few more years so you can afford to hopefully retire.
It is important to visualise the kind of retirement lifestyle that you would like to live, otherwise you are leaving your golden years to chance. There is nothing worse than reaching retirement age and realising you can’t afford to retire or have to downscale significantly. Goodbye dream retirement!
Ideally, consult with your financial adviser to give you a projection of your potential retirement income based on your current savings and contributions, and then decide if it would be sufficient for the lifestyle you want or whether you need to increase your retirement savings accordingly. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.