Plan retirement … even if you don’t plan retirement
In all our years working with clients, experience says that people fall into two camps: the can’t waits and the icky guys … we’ll explain in a minute.
Advertisers love to paint retirement as a permanent holiday: jet-setting, sight-seeing, indulgence, dinners and grandkids …
It sounds dreamy … but maybe it’s not for you.
Pay-offs and ikigai
There’s no science to Europe’s retirement paradigm. It dates back 150 years to an era when folks generally worked until they died. Employers calculated it’d be more economic to pay off older workers and make room for younger ones.
It was never about rewarding loyal service. It meant pushing scraps of cash to older workers, now perceived as weak, to get rid of them. It was all in the name of productivity.
Look around the world, especially more remote places, and the concept of retirement doesn’t really exist. On the sandy islands of Okinawa — equidistant between Japan, Taiwan and China — citizens don’t talk about retirement. They also happen to live longer than the rest of us.
Okinawa natives focus on the concept of ikigai (pronounced icky guy) which roughly translates as the reason you wake up in the morning.
It’s when work isn’t work, it’s more of a calling. And why would you quit your calling?
£37,000 p/a for comfort in later life
Retirement in the UK heated up again last week as an update to the PLSA’s Retirement Living Standards came in the wake of rising inflation.
New figures show that we’ll all need to hike our expectations by about 20%, as so:
- For a basic standard-of-living in retirement you’ll need an annual income of £12,800
- For a moderate standard-of-living in retirement you’ll need an annual income of £23,300
- For a comfortable standard-of-living in retirement you’ll need an annual income of £37,300
Aim for the comfortable option and a state pension will cover barely 30% of it. Obviously, that’s a significant gap that, if you plan to retire, will have to be bridged.
But maybe you’re not worried about pensions and saving.
Maybe you’ve found your calling. Maybe you’re an icky guy.
My icky guy inspiration
Helena here and I personally see myself going ‘til I’m 99.
Only this week I spoke with my favourite 70-year-old, a man who didn’t retire and never saw work as work. He’s someone who has travelled the world, met Hollywood A-listers, and found big bliss in little work things …
For him, and for me, we feel we’ve found our calling. Our reason to get up in the morning.
But then the obvious: life happens when you’re busy making other plans and my favourite 70-year-old was forced to call time on his work adventures due to illness.
This is the prudent side of retirement planning. Us icky guys might plan to work ‘til we drop, but nothing’s ever guaranteed.
A little planning goes a long way
Even if you’ve found your calling — you’re an icky guy — retirement planning shouldn’t be overlooked. You mightn’t see retirement in your future but maybe it sees you.
Retirement, savings, pensions – many people struggle to get to grips with when to start, and how much they’ll need.
There are great tools to help, such as the one Guiide is building, but unfortunately most of Guiide’s users are over 55 … and that’s pretty late in the day.
Because like everything else in finance, the earlier you get planning the more advantageous it’ll be.