Whether you’d like a permanent break from the rat race or a stable income during your golden years, having a solid vision for your retirement is an important first step in planning your long-term investment goals.
In this article we look at some of the things your retirement vision might contain, and find out how they will affect your investment strategy.
Early retirement: is it still affordable?
One of the first questions you’ll need to ask yourself to create a retirement vision is a simple one – how old do you want to be when you retire?
There was a time (many years ago) when people retired at fifty, but as life expectancy increased and workers found themselves in good health into their sixties, the retirement age crept steadily higher. Today, many people are forced to retire at sixty-five, with others working well into their seventies. However, many companies still offer early retirement packages and many people simply don’t want to work forever – but can you afford to retire early?
- People are living longer than ever, and with average life expectancies in developed populations ranging from 75 to 85 and above, you’ll need a very large investment portfolio to cover your living expenses over the three or four decades between 50 and 85.
- Fortunately, early retirees don’t need to rely solely on their pensions or investments to survive – at 50, a person in good health may have twenty years or more to generate income during their retirement.
Staying the course – why leave the job you love?
Early retirement may be a good option for someone who wants a break from their usual routine, but what if you really enjoy your job and work environment? If your work is challenging, rewarding, and well-paid, you may want to stay in your current position as long as possible.
If you’re planning on staying with your current employer until the maximum working age (this could be 65 or even older, depending on your company’s HR policy) you’ll need to take a few things into consideration
- Will you be able to retire comfortably on your pension and other investments?
- Will you still be in good health at retirement age?
- Could you work flexible hours or take extra leave for travel and leisure?
- Do your children and grandchildren live nearby, and if not – how often would you like to see them?
These are just some of the questions you’ll need to ask yourself if you choose to work into your sixties and beyond. If you do choose this option, you may need to put aside less money each month for retirement than someone who is planning to retire early – you could take that holiday you’ve always wanted to go on or buy a holiday home while you’re still working and can rely on your salary to meet the monthly repayments.
Sticking to your retirement vision
Whatever your plans for retirement might be, the most important thing you can do for your financial future is to choose a vision and follow it through.
If you’re feeling the itch to leave your office job behind and start your own business, start planning today for your early retirement – and if you’re planning on bowing out of your job at a ripe old age, make sure your pensionable income will carry you for the rest of your life.
Contact us today and start mapping the road to retirement with an expert guide.