Can you afford not to work when you retire?
People are now living much longer after they leave the workplace, but will you be able to afford not to work?
Research by the Office for National Statistics (ONS) has found that men can now expect to live 15 years after they retire and women on average will live for another 20 once they stop working.
In the 1960s there was very little difference between life expectancy and the ages at which people finished working – particularly for men, who typically lived for two years in retirement, compared with 11 for women.
Now both men and women are facing up to two decades in retirement. As fun as that may sound, you are still going to need money to pay bills and to ultimately live and enjoy your retirement.
People are now getting on the property ladder later in life so you could find you are still paying a mortgage or even rent when you retire, or you may want to go on lots of holidays or spend time with the grandkids.
All this needs to be funded and would be pretty difficult without a regular salary coming in.
There is some government support such as the state pension, but this is unlikely to be enough to cover holidays or other household expenses.
Instead, saving into a pension can ensure you build up a retirement nest egg that can grow while you are working and be accessed once you are ready to retire. It is never too early to start and if you can even get the contributions to come out of your payslip, which saves you some tax.
This way you won’t have to worry as much about money once you stop working and can enjoy the many decades you will hopefully have left ahead of you.
- The value of an investment and any income from it can fall as well as rise and you may not get back the original amount invested.
- Past performance is not a reliable indicator of future performance and should not be relied upon.
- HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be
foreseen
