For most employees the promise of a final salary pension is long gone and while many people have chosen to take lump sums from their employee pensions, they have not necessarily secured their financial futures by investing wisely for their retirement.
It’s hard for most people to ascertain how much they’ll need for a comfortable retirement. Inflation and market fluctuations combined with global economic uncertainties affects pensions, investments and assets. Not so long ago a million pounds was considered a fortune, now it doesn’t stretch as far as it once did. According to Time magazine, $1million in savings will have the spending power of just $306,000 in 40 years’ time.
While early retirement is available for some people in the public sector, such as the police or teachers, for most people retirement has shifted later rather than sooner. Yet early retirement is not an impossible dream, especially for young entrepreneurs and successful ‘millennials’, some of whom can afford to stop work in their 30s.
What they must consider is how long will their bank balance stay healthy and do they have enough funds and investments to last them a lifetime, perhaps another 50 years. It’s vitally important to plan for your retirement as early as possible.
Geoff Newman, Development Director at Lyndhurst says
“Whatever your circumstances it’s important to consider things like the cost of living, where you choose to live and what you want to spend your money on. Quality of life is also so important and you want to be able to fund your interests, whether that’s golf, holidays or eating out etc.
We encourage our clients to plan ahead and it’s our job to give them the best advice so that they can make better decisions about their financial future. Early retirees will still have to pay tax above a certain limit on any income they receive from their investments. We think it’s important to make investments that will continue to grow and even if you retire early you may want to continue to work part time or take up a completely different profession or a lucrative hobby.
Most of the people who retire early still want to do something that inspires or challenges them and it’s even better if they can make money out of it, knowing that they are not relying on the income. It’s a good place to be in at a relatively young age but you still need professional help to ensure that you are making the most of your money and assets.”