Nobody visualises their retirement in black and white, one that that might require you having to rely on family handouts or the state during your golden years. We want to see a retirement in vivid colour. We want to thrive not just survive in retirement.
Using historic long-term inflation trend lines, the cost of living in the UK has increased by approximately 2.5 times over a 30-year period. To illustrate the devastating effect of inflation, this means that if you retire on an income of £25k at age 60 you will probably need around £62,500 at 90 to buy the same goods and services as you did aged 60. The good news is that most of us spend much less the older we get. Perhaps more on heating and less on eating, but the numbers still tell a startling story.
To further illustrate the devastating effect of inflation over time, let’s take a look at the alarming rises in costs of some everyday items we use over a 30-year period:
Now you can see the upward cost trend and how important it is to be aware of that silent assassin inflation. It is relentless. It is imperative when looking at retirement planning that inflation is properly factored into your individual retirement plans. Overlook it at your peril. The good news is that we are here to make sure you don’t.
Most investors simply want their investments to maintain their purchasing power throughout retirement. If it achieves this it will have done its job. Using state of the art cashflow modelling software we can show you how your spending looks alongside your income and whether you can spend more than you thought or if you might need rein things in now and then. Forewarned is forearmed. Demonstrating how your spending looks in relation to your income will give you the peace of mind that you can live a dignified and independent retirement.
Although running out of money is the real worry, I would say it could be a financial sin to die with too much. After all, what is the point of saving all your life to do all the things you dreamed of doing only to constantly hold back thinking that you never have enough?
The Dalai Lama, when asked what surprised him most about humanity, answered
“Man! Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”
