Hindsight is a marvellous thing, which is why it’s often useful to ask those who have transitioned into retirement what they might regret. According to a survey by pension company Canada Life, 40% of retirees had “retirement regrets”, that could have been solved before they retired.
1. Not knowing how much is required for what lifestyle (and not saving enough)
Which? magazine reckon that there are three levels of retirement lifestyle, with a minimum income to support them:
Essential
Covers essentials only
£19,000 for a two-person household
Comfortable
Essentials plus short-haul holidays and enjoyable recreation and leisure
£28,000 for a two-person household
Luxury
Comfortable plus long-haul holidays, club memberships, private healthcare and a new car every 5 years
£44,000 for a two-person household
10% of retirees wished they had adjusted their pre-retirement lifestyle to cut back and save more.
2. Took retirement too early
According to the survey, 8% of retirees regretted retiring as early as they did.
Which? magazine lays that at the financial door and suggests the solution is about deferring pensions. I think it’s much more about not having a proper retirement plan in place, and therefore uncertain of what you want to do regardless of how much (or little) spare cash you have.
When you plan your retirement to include all the non-financial aspects, the financial element can be planned to support everything else. If you plan just the financial and not the fun, you’ll not know what to do with yourself every day.
I offer a 30-mins Discovery call where we can discuss your situation – it’s free and you can book it online here.
3. Not increasing pension savings whilst working
In the survey, one in six retirees regretted not saving enough in their pensions, and with hindsight would have boosted those savings. By law, your employer need to put a minimum of 8% of your earnings into your pension. They must contribute at least 3%, with the remaining 5% coming from your salary. Whilst this is a minimum, it is certainly not enough to build a sustainable pension pot.
Depending on your type of pension and its T&Cs, you can usually add more into your pension either by paying in a lump sum or increasing your % contribution. This extra saving can be boosted further if your employer matches your monthly contributions.
4. Not paying off the mortgage
This may not be so much of an issue for those within 5 years of retirement, but it could certainly become a big issue in the future as mortgages are taken out later in life and with longer terms.
One solution is to overpay whenever possible, as most lenders allow an overpayment of up to 10% of the balance per year.
Speak to your mortgage company to talk through some of your options.
5. Not clearing debt
Significant debt is a burden at any age, and certainly not something you want to be concerned about in retirement. If you are approaching retirement and have debts that worry you, act now rather than put it off to deal with after retirement.
- Talk to your financial advisor if you have one.
- Check the excellent advice at the Citizens Advice Bureau website
Talk to a CAB advisor or other reputable debt charity such as StepChange
Plan your retirement from every angle
If you’re struggling to plan for your retirement and are concerned you might be ‘missing something’, talk to me. My experience and skill is helping people like you take an overview of what retirement involves across eight key areas, only one of which is financial. Start with a free 30-mins Discovery discussion and we can work from there.
- Call me
- Email me
- Book Your Discovery appointment online
- Book your seat on our next “Life Beyond Teaching” webinar
DISCLAIMER:
This article and others on this website are for information only and do not constitute or should be taken as financial advice. For specific financial advice, you should consult a professional financial advisor. Contact us to discuss our estate and retirement planning services and how we might help you.
