The Death of Retirement

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Andrew the Muse




Thu Sep 03, 2015 6:40 pm

The Death of Retirement

by Andrew the Muse » Fri Apr 15, 2016 1:45 pm

The Government's 8% 'automatic enrolment' scheme is NOT the answer to a good retirement.

According to Steve Webb of Royal London Mutual Insurance Society Ltd,
if you want to replicate the pensions of people retiring today,
you face working into your late seventies
even if you save systematically from the start of your working life.

Given that the average life expectancy of a baby born today is about 82 years,
that's not much of a retirement.

Work Until you Drop.jpg
Work Until you Drop.jpg (9.6 KiB) Viewed 1790 times

So what can be done if anything?

Most of us simply drift into retirement.
Typically we pay into a pension scheme
and assume that when we retire at the State retirement age
we'll have enough for our retirement.
By then it is of course too late to do anything to remedy the situation
if it's not enough.

The key is planning ahead.

The first thing to consider is retirement lifestyle.
What are you going to do with your time?
Make a list and add some costs.

Next you need to think seriously about how much money you'll need.
Most people will say that they need less than when they were working.
I beg too differ because bills don't stop.
The only thing that will stop is your work commuting costs
and probably your mortgage payments,
which incidentally will be insignificant by the time you retire
due to inflation and the way repayment mortgages are structured.

I believe that you'll need the same income, if not more,
because you'll be having to fill your time 24/7.
Think about that for a moment.

Steve Webb talks about
a Gold standard of 2/3 pre-retirement income
and a Silver standard of 1/2 pre-retirement income.
I would add a Platinum Standard equal to pre-retirement income
and a Diamond Standard equal to more than pre-retirement income.

According to Steve Webb, if you start saving the minimum 8% required by the Government at 21,
you would need to work until 77 to achieve a Gold standard,
or until 71 to achieve a Silver standard.
I would estimate that you would need to work until 89 to achieve Platinum standard.

Steve adds that in order to achieve Gold standard,
if you started saving at 35, you would need to work until 79
and if started saving at 45, you would need to work into your eighties.

Clearly the Death of Retirement is a very real possibility for a lot of people
and the only way to avoid it is by saving more than 8% of our income from day one.
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Sun Jun 12, 2016 12:52 am

Re: The Death of Retirement

by joannhm » Sun Jun 12, 2016 1:35 am

What else is possible and are there profiles of people whose abundance trajectory land differently and even there are, perhaps, the few who just got lucky, and may represent the exceptions to these statistics? Most of us are wise to heed the statistical trends and I think these figures are helpful and very representative of what most of us can expect given where we start. Thank you, Andrew.

I do believe that we can influence our fortunes and our experience of wellness and our emotional quotient that may have us happier and with greater options than some. However, I'm compassionate to myself when I've been of the profile that is not likely to be far from the "average" -- unless... and it is the UNLESS that we are challenged by and that in itself may add something to the mix -- the Cat in The Hat. When I was young, creative artists always seem to get a bad reputation in terms of the starving artist. However I do think I have traveled through many archetypes -- and some are much more attractive to Life in Retirement -- or Life In Fulfillment or even Life as we know it. I wish us all health, love, peace, wealth, and wisdom -- and perhaps some magic and faith -- at a time when many people notice fear and scarcity. We will need some of the good stuff -- to know we are OKAY -- always. Receive and give where you can -- and listen up to the people who know the numbers and guide our awareness and our actions.
I haven't got a lot figured out and sometimes I know nothing at all -- but I see that a little give in the right places can add my pebble to the ripple effect beyond myself. Thanks for reading this -- have a great day.

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