The financial perspective
Preparing financially for retirement is a lifelong process of work and saving. If you haven’t worked or saved you should have the Government safety net first of the state pension and then of pension credit and “door to more” benefits.
Like most people of my age (early sixties), the point at which I retire is based on my appetite for work (substantial) and my ability to support myself when not working.
That’s the easy bit, even with market uncertainty, I know what I have in my big three sources of income – pension from work , pot from work and state pension. I am one of the lucky ones , I will be alright financially and I know that many of my readers will be like me, reckoning we’ve got by more by luck than judgement. Frankly, I’ve got by due to the generosity of my previous employers.
The hard bit’s what you make of the rest of your life. This chart (American but a proxy for the UK) shows me the challenges that lies ahead. The problem is social
As we grow older, we get lonelier. We lose the company of our parents early in our careers, our children late then our co-workers , but it is the loss of a life-partner that leads to the solitary existence of those over 80.
“Time alone” continues to increase.
The ambiguity in “time alone” is that it can mean either time spent alone” or “time being the only thing” that increases.
Talking to older people, I realise that time is a resource that is scarce when we work and bring up a family but in abundance when we are lonely.
People often talk about older people not needing money in later life , as if it is a given that they will stop wanting to get out. In my experience, the lack of money keeps old people from doing the things they want to do, to see friends, go to church, get away. It is wrong of us to wish on those who are faced with “time alone” to suppose they have no ambition with that time and that they are happy to be solitary.
Are we planning on being alone in later life – or can we plan now for an alternative. We have little control of some aspects of this – most especially how long our partners can stay with us, but we can build up social networks and prepare for the long holiday of retirement through improving our social network.
I have missed one important aspect of getting old out, that is “friends”. Friendship doesn’t occupy much of our time after our childhood, but in my experience it becomes increasingly important to people as other social comforts drop away. The rise of Facebook among the over 70s has been much remarked, it is often thought of as a way of keeping in touch with families but I suspect social media will increasingly become a comfort to older people as they master web-streaming and can organise their time without the constraints of travel.
Social messaging will gradually replace Christmas and birthday cards, even for older people. I am already thinking of my social networks as part of my retirement planning, I enjoy seeing “retired” against many of my erstwhile co-workers, in a few years , maybe I’ll have one of those badges too!
I wrote yesterday about the paucity of thinking about retirement we get at pension conferences. My frustration to the one I went to on Wednesday was that everyone focussed simply on the financial aspects and the acute problems of this “cost of living crisis”. But in 2030, today’s cost of living crisis will be a distant memory and I will be thinking about being 70.
Financials will be the least of my problems by then, I will be thinking more about my health , my time and what I do with it. Time is the only commodity that increases in old age and without a game plan, I will risk losing one of the most precious gifts of older age.
Wealth does not make for happiness, but financial security to afford to take decisions which enable me to maximise my enjoyment in my final years, is something which I think important to me now.
The longest holiday of my life could be one constrained or one of opportunity. Which is why I want a financial plan in retirement that makes sure my money lasts as long as I do!