Paul Hammond writes:
It’s hard not to feel concerned about your retirement funding and lifestyle when the media is shouting in ever more alarmist headlines. Here’s just what I saw in my five minutes tea break before writing this article:
- “Cost of living crisis spirals”
- “Homeless students on rise amid cost of living crisis”
- “The UK economy: what an almighty mess”
- “Annual deficit on course to top £100bn”
Even the consumer champion Martin Lewis has warned the next PM (whichever of them wins) that:
“We are facing a potential national financial cataclysm.”
Perks and prediction
It’s easy to just think about the perks of retirement – longer lie-ins, travel plans, playing your favourite sport, enjoying a good book. However, we also need to put time aside to properly plan for unpredictable and unforeseeable changes in our lives. This includes both financial planning and retirement planning (with a retirement coach like me).
Why? Because you need to be flexible. Just as the pandemic scuppered many people’s travel plans, the cost-of-living crisis may potentially affect your retirement spending plans. That in turn impacts on your chosen lifestyle
- With utility costs and inflation rising, you may have less “left over” at the end of each month than you had originally based your retirement plans on
- You may therefore have less available for the fun stuff, or for major projects such as improving your home.
- You may also see the need to help your children and/or grandchildren if they are going to struggle financially.
The cost of living crisis is very real, but as Martin Lewis says, we can all do something and we need to do it now.
“More intervention and action is needed, and it needs to be quick. There is a hard deadline coming.”
Five steps for retirees to act on
As Corp. Jones would say, “Don’t panic.” But don’t be an ostrich about this either. Here are five steps you can take right now to stay ahead of the headlines.
- Book a review of your financial retirement planning
If you can’t quite remember your monthly income figures, or how much your pension is worth, or even how much interest your investments are bringing in, now is the time to check. With your financial advisor, take a look at what you have, what you need, and what you might need to do to future-proof as far as possible.
- Take a money makeover
Check if you can get a better deal on anything you pay for on a regular basis – energy, broadband and mobile phones, bank accounts with perks, car and home insurance, etc. These two sites will guide you through a “money makeover” process:
- Are you entitled to more money?
If you are over state pension age, you may not be aware of all the discounts and grants that may be available to you. If you are eligible, claim them. AgeUK has a comprehensive list with links for retirees and seniors here.
- Act now, save later
If you’re looking to improve your energy efficiency with solar panels, a wood-burning stove, or even an electric vehicle, start the process of researching, choosing and buying now.
- Many people will not want to think about replacing an inefficient boiler or insulating the loft when it’s 30 degrees outside.
- Remember that the shiny electric vehicle in the showroom will need a charging point at your home to charge efficiently and safely.
- Also, with supply chains stretched and labour in short supply, items may take a lot longer to be delivered or installed.
In other words, get ahead of the game.
- Find a part-time job
OK, I know you didn’t retire to work, but…The ONS estimated that at the end of June 2022, there were almost 1.3million job vacancies in the UK.
These are not just the low-skill low-paid jobs either; all sectors are crying out for skilled, qualified candidates. If you have the skills they need, you can put forward a case for part-time or job share that gives you the employment and enjoyment, whilst the business gains your experience and expertise. It is a win-win that will also boost your income.
If you apply for suitable jobs now, you’ll be ahead of the people who want to “enjoy all the summer”, and that includes a proportion of 2022 graduates. The sooner you start, the more you can start to boost your income even by a little, and build a buffer against predicted price rises in the autumn.
Can’t find the job vacancy you want?
Invent it. Look at businesses that might need your specific skills and reach out to them with a proposal. You have literally nothing to lose save a bit of time and effort. Just putting yourself on their radar can open doors that otherwise you wouldn’t even now about.
More benefits of work
Moving from working to not working may cause you to wonder if you “still matter”. You might find this feeling of “not being needed” more uncomfortable than you expect, as work has kept you interested and interesting too.
Working may also help you stay married. Divorce among retirees (known as silver separators or silver splitters) is rising. According to ONS research, the number of men aged 65 who are divorcing is up 23 per cent, and an even higher 38%increase for women.
As a couple, you need space for your relationship to thrive and prosper. This is particularly true during your transition from work to retirement. Keeping active in activities outside the home is crucial for both your health and wellbeing – and that of your partner too. You need to retain sense of self identity which in turn boosts your self-worth.
Keep building your skills
Even if you have more than sufficient funds to last you for 40+ years, retirement should never mean switching off completely. Growth in retirement is important so consider:
- Working or volunteering part-time.
- Updating your job skills so they are up to date and relevant.
- Choose to be a lifelong learner.
Time to book that retirement review!
Contact me for a consultation to discuss your unique situation.