Wealth Planning –
Getting ready for a longer life
Are you on track to receive a telegram from the Queen?
OK, so it might not be a telegram in 2020, but to mark Pension Awareness Day 2020 we’re reflecting on the conclusions from a 2016 book by Lynda Gratton and Andrew Scott, 100 Year Life. Despite the extraordinary year we’ve had and the loss brought about by Covid-19, it is a fact that across the world, happily, people today are living longer. Average human life expectancy continues to grow at the rate of two to three years every decade, as it has done over the last 150 years.
According to 100 Year Life, based on current life expectancy data, a child born in 2007 in most of the advanced economies (US, UK, Japan, Italy Germany, France and Canada) has more than a 50% chance of living past their 100th birthday.
Increased longevity needs to be matched by an increase in quality of life, and this combination will have major implications for how people manage their lives and careers. For many, the level of savings required to provide the income needed to maintain their expected lifestyle in retirement is becoming unachievable. People in their mid-40s are likely to need to work into their early to mid-70s, while those in their 20s will be working into their late 70s, and even into their 80s.
The standard three step life of education, career, and retirement is changing and as we restructure our lives and careers, it’s vital to ensure we have a financial plan that adapts with us too. With current low interest rates and the impact of inflation, having a plan designed to meet your long term goals is key.
Is it time to start to think about the life you want and how much you need to save to make it happen? For those lucky enough to live to 100, make every day count.
The best place to start is to understand what provisions you have in place currently, and what these are likely to yield in your retirement. There are tools that allow you to plan on your own using online solutions which work for some. However, if you need help, reach out to a financial adviser who can review your current and future cashflow, explain the impact of inflation and investment strategies, as well as recommend a solution that is right for you.
Don’t put off something you can do today – physical, mental and social wellbeing needs to be balanced with financial wellbeing, so if you think your finances could benefit from some help, make the first step today.