The news this week that the State Pension age could be raised higher than the life expectancy for some living in the UK is certainly worrying for those who may be affected. It got me thinking about how many people find it difficult to recognise the urgency of investing for retirement. A few years ago, I came across a simple but very effective illustration. It’s a visual exercise that can be shown on a ribbon or, as I prefer accuracy, a tape measure. Don’t just imagine this – go and find a tape measure to see the results.
Now, at what age do you want to retire? Extend the tape measure to this number in centimetres. Next, measure out your age in centimetres. Do you see what is left between the two points? This is how much time you have left to work towards your pension. For many people, seeing the result laid out like this can really put the timespan into perspective. You may find that you have serious investment work to do!
Urgency of Investing
There are always excuses and, let’s face it, sorting out paperwork is a chore. However, the reality is that investing for your retirement cannot wait. As Andy wrote last month in his post, Dust Off Your Pensions, “choosing a pension and deciding how much to pay into it is only the first step. Deciding upon a suitable and robust investment strategy for the long-term will have far greater an impact than most of us could imagine.”
If you are not sure whether you will have enough to retire or are worrying about the costs of long-term care then you should sit down with a financial planner. Cashflow modelling can help you to better understand how much you will need to save, when you will be able to retire, the potential impact of illness, and whether downsizing your home might be necessary to help you meet your lifestyle goals. Like the tape measure, a cashflow model provides a visual timeline that illustrates your life and brings things into perspective.
Living Life to the Fullest
Alongside your financial choices, it is just as important to realise that what you can do with your wealth is also illustrated in the centimetres left between your age and your life expectancy. No matter how many centimetres you have left, your life is far from over. Look down at your tape measure again. Each mark should be a call for celebration and a reminder to enjoy it.
If you would like to talk to a financial advisor about how to invest your wealth and enjoy a life well lived, please get in touch. We’d be delighted to hear from you.
This article does not constitute financial advice. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner to take into account your particular investment objectives, financial situation and individual needs. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections.