People often share common goals for their eventual retirement, so we recently interviewed individuals who are thinking about this stage in their lives. We wanted to better understand their attitudes towards investing, and to see how their plans fit in with their aspirations. The following is a broad summary of what motivates them. You may find it useful.
Time for a new chapter
Rather than yielding to an outdated view, many embrace their retirement as a new stage in their lives – one which represents freedom, dreams and possibilities. Of course, there will be endings, perhaps their career and children being at home, but there are also new beginnings: time to spend with their partner, to travel and to pursue hobbies and passions.
"We'll do loads of travel, all the places we have never been, and we are
thinking we may finally get the big house we've dreamed of."
Like most adults, their lives are multi-faceted. Many factors preoccupy them and many things make them feel complete.
This is viewed as a key component of their self-worth and identity; many are at the pinnacle of their career. They may have transitioned to being a business owner or consultant to allow a better work/life balance. Their work is seen as the key enabler to fund their lifestyle and security in future.
Fun and recreation
The respondents strongly feel they have ‘earned’ the right to enjoy life. Experiences are valued over things. Interests are diversified and typically cover sport, wellbeing, travel, food, culture and socialising.
The health of their finances is essential to both their future comfort plus a tangible signifier of their success. Yet they do acknowledge some pressure to make the most of the funds they have accrued, and to proactively meet their future responsibilities.
Family and friends
These are the most important elements in their lives – the relationships they value and connections they build are key. Yet unsurprisingly, there is a delineation: family first, with peers essential for validation and camaraderie.
They try to maintain their health, but don’t worry about it too much. A trigger may prompt a change of mind, but until then, it’s more a case of doing the best they can.
A stable phase, but transitionary
In pre-retirement most are settled and feel generally content with how they live. They are comfortable and enjoy shared experiences – whether travel, good food, watching films or pursuing hobbies and passions. They appreciate their capacity to treat loved ones, value the luxury of savings to renovate their property and don’t worry too much about unexpected expenses.
"My ideal retirement would be to have enough so I don't have to think
twice. To not even check my balance and just pay for something."
While life is there to be lived, they are conscious that at some point they will be stepping from one world to another – typically a positive journey, with exciting possibilities – but also one which must be funded appropriately.
Time to dream and plan
For the respondents, retirement is naturally a great unknown and the reality won’t be apparent until they actually face it. But what is clear is that they wish to maintain the level of comfort they have in their lives now, while having the freedom to discover new frontiers.
This takes some planning. The extent of their preparation depends on whether they are facing a trigger event, such as children going to university, illness, divorce or a change of work habits. Even if there is no particular trigger, the interviewees view it as an adventurous time, but one which must be balanced by a forward-looking pragmatism.
"My kids have moved out and I need to start planning
how I will support them with their own homes.
It needs to be fair between the three of them."
The primary financial concern is ensuring there are sufficient funds to ‘survive’ while often needing to juggle this with financial commitments to their children. Yet their practical needs will be paired with their aspirations.
People start to ideate broad schemes based on ambitions and hopes – their ‘bucket list’. These are often idealised but illustrate a mindset shift towards the possibilities and potential of this new chapter.
If you are thinking about retirement
Your retirement may be some way off. But you may still think about how you would like to live in retirement, the dreams you want to pursue and the financial resilience you may have to acquire to achieve your potential.
You may also have the freedom to explore – and to maximise – how you pay for your future. You have the power to change providers if they are not delivering, and to analyse your financial situation to ensure your money is working as hard as it could.
For example, you can assess how long your money may endure under varied conditions with these useful planning tools. See if you are on track to meet your goals by changing such variables as your risk level, tax rates, contributions and withdrawals.
At some point, too, you may need some tailored advice, for instance, to help you interpret complicated pension rules, make the most of tax wrappers or to efficiently gift some of your wealth. Whatever your circumstances, our professional team is on hand to help you make the most of your next exciting stage in life.
Please note, the value of your investments can go down as well as up.