The Real Cost of Retirement Means and The Importance of Planning

Retirement has never been more expensive, with research by the Pensions and Lifetime Savings Association finding that a moderate retirement lifestyle is 38% more expensive than it was last year for the average person.

These increases are due to rising costs of living and inflation, but what do they mean for you? That it’s never been more important to start planning for your retirement as soon as possible.

Let’s explore the different levels of retirement lifestyle, the importance of? retirement planning, and how to put a robust strategy into action for your later life.

The three retirement lifestyles

According to the Centre for Research in Social Policy at Loughborough University, there are three retirement lifestyles:

1. Minimum retirement

This means having enough money to cover bills, spending about ￡50 a week on food, ￡15 a fortnight on takeaways, having no car, and enjoying a week-long UK-based holiday per year.

It’s essentially getting by with a few luxuries, and as of 2024, requires a whopping ￡14,400 per year for a single person and ￡22,400 for a couple, on average.

2. Moderate retirement

For a moderate retirement, you can add some takeaways and monthly meals out to the above, along with a fortnight, three-star, all-inclusive holiday in the Med and a weekend away in the UK per year.?

You should also be able to afford a small car and its running costs, some occasional new clothes, and the ability to financially help others in your family, to some extent.

This retirement lifestyle would require ￡31,000 per year for a single person and ￡43,000 for a couple, which is a 38% and 31% increase respectively on last year

3. Comfortable retirement

For a comfortable lifestyle, you’re looking at all the above plus a two-week, four-star holiday abroad a year, and three long weekends away in the UK. You’ll probably also have more to spend on Christmas and birthday presents, food, and property maintenance, and a larger car you can afford to run.

The amount needed to live this comfortable retirement is up to ￡43,000 for a single person and ￡59,000 for a couple, which is a massive increase from previous years.

The importance of planning for your retirement

As you can see, retirement costs are higher than ever with only more rises on the horizon, so retirement planning has never been more important. This means getting your finances in order and a strategy in place that includes savings, pensions, and preferably some investments.

The alternative is working past retirement age and having less time to spend with your family, as well as less money to help them out when they need it.

A diversified, proactive approach to your retirement will put you in better stead for life after work, but it’s important to note that it’s never too early to get started. The problem is that it may well be too late.

Get retirement-ready today

As an experienced financial advisor with vast knowledge of investments and retirement options, I’m best positioned to help you plan for your twilight years.

With a strategy based on your personal/financial circumstances and attitude to risk, I build long-term relationships with my clients with a tailored, personal service based on the fundamentals of financial planning. I also carry out regular reviews to make sure your retirement plan is on track and goals are achievable.

To get started with your retirement plan, let’s chat. Drop me a message on LinkedIn, or click the link below to arrange a meeting, make an enquiry, or request a callback.