For some, retirement is a dream they’ve been eagerly awaiting. But research suggests that many of those approaching the milestone worry about the impact of giving up work on their wellbeing. The findings highlight why the decision of when to retire is about far more than the amount that’s stored in a pension.
When we think about retirement, it’s often the financial side of the decision that takes centre stage. When you look at the number of people that are choosing to work past traditional retirement age or slowly decrease working commitments, you may assume it comes down to money. However, growing evidence suggests it’s related to other areas too.
In a survey conducted by Aegon, 42% of those favouring a phased transition stated money was a reason. However, for many, the decision is at least partially influenced by wellbeing and lifestyle. Findings suggest that seven million workers have concerns about giving up work completely. Among the reasons to continue working beyond traditional retirement age were:
- Maintaining mental sharpness (59%)
- Sense of purpose (44%)
- Social engagement (39%)
Steven Cameron, Pensions Director at Aegon, commented: “It’s interesting to look at why we’re working later in life. For today’s over 50s, it goes beyond earning an income and is more about the increasing evidence to suggest that it’s good not just for your wealth but your health.
“Workers see transitioning into retirement as having the best of both worlds – benefitting mentally and socially from work, continuing to receive an income and enjoying more leisure time.”
Looking beyond your pension
Your pension and other retirement provisions undoubtedly play an important role in when you decide to give up work. It’s not surprising it’s an area that is often focused on either. You’ve likely been paying into your pension for decades. And while you may have daydreamed about what your retirement will look like, how seriously have you thought about what your life will look like?
If your retirement plans are currently filled with vague ambitions to travel and relax, it may be time to take a deeper look at your desired lifestyle. Building a fulfilling retirement is about more than simply having the money to spend.
While working past retirement may not be something you’re interested in, employment is often a big part of our lives. Having built up a career, your position may be a source of pride and give you a sense of purpose. Work often also provides social activities, goals to strive towards and a way to keep your mind active; all things you may miss once retired.
As a result, it’s natural for some sort of gap to be left when you do retire.
When you think about retirement, how do you envision filling your days? It’s normal to think of the big things here, perhaps a trip abroad or undertaking a home renovation project. But the day-to-day tasks will have an impact on how fulfilling your retirement is too. If when planning for retirement you’ve focused on how much income you’ll have but given little thought to the lifestyle you want, it could lead to disappointment.
Whether you want to indulge in a hobby, spend more time with grandchildren or learn a new skill, having a focus as you enter retirement can help you build the lifestyle you want.
Carving a path that’s right for you
The key things to remember when you’re planning for retirement is that it can be what you make it. Bringing your aspirations and concerns into the planning process can help you carve a retirement path that’s right for you. You may decide that retiring as soon as financially possible is the best decision, opt for phased retirement or plan to keep developing your skills in employment.
Of course, these areas do need to be considered with the retirement provisions you’ve built up and you may realise you can achieve more than expected.
This is where financial planning can help. While it’s a process that will look at the savings you’ve made, to be effective, it should go beyond this too. It can support you in realising what you want from retirement as you make plans, putting you on the right track to achieving them.
Often, retirees worry that they’ll run out of money or don’t have enough income to turn dreams into a reality. It can lead to a retirement that promised much but fails to deliver. Financial planning can help give you the confidence in the provisions you’ve made and how it aligns with your overall goals for life after work.
If you’d like to discuss your retirement plans, please contact us.