A leading older people’s charity is calling for more advice to be given to people from the age of fifty onwards to help them make adequate financial preparations for their retirement years.
The charity recently published a report which proposes that older people should aim for general financial wellbeing instead of mapping out a rigid plan for their later years. There are also concerns that many people simply fail to start planning early enough for managing the years after their working life is over.
Many people end up in financial difficulties in later years simply because life did not go to plan. Unexpected events such as a divorce or illness may completely disrupt any plans people made in earlier years. A divorce suddenly requires money to be split across two households, so is very draining on finances, and illness may incur additional unforeseen expenses.
The report suggests that people should start planning earlier and should have regular financial health checks to make sure that they are keeping on track to fund their life after work. The generation currently at risk is the baby boomers, those born in the years from 1946 to 1964.
The report indicates that this age group is ill prepared for managing finances in retirement. One of the difficulties is that people of the baby boomer generation are less trusting of financial institutions and advice than before, having lived through recessions, bank crises and bail outs, so have not sought help from financial advisers.
At the age of fifty, pensions and retirement investments may be far from the minds of many, but this is the ideal time, if not earlier, to start planning for funding a life beyond work.
Many people cannot invest a great deal in savings prior to their fifties because they often have less disposable income during the earlier child rearing years. As children get older and mortgages approach completion, it's a good opportunity to focus on saving for retirement.
With life expectancy greater than a few decades ago, people can now expect to spend well over a quarter and maybe over a third of their life in retirement, so it’s important to have finances in place to provide for this period.
Many banks offer financial advice services, but for those who seeking more independent advice, there are other options. The Money Advice Service is a government funded organisation which offers free financial advice, and is independent of any banks.
There are many private financial advisers too, who describe themselves as independent, but of course they may have biases towards particular products, so personal recommendations from trusted friends are helpful.
In a time where there is so much uncertainty about the adequacy of pension schemes, people should do all they can to make their own financial preparations for their retirement so that these years can be enjoyed to the full.