Retirement Plan Considerations – It’s Not All About Money

by | May 6, 2021 | Retirement & Pensions, Investment Advice, Back to Blog

Naturally, when addressing your retirement plan considerations, most of our conversations with you are about money, and how we can help you secure the future of your family and maximise your wealth. However, we also recognise that your financial position is only one single input to help you live a rich and fulfilled life. Family, friends, your social life, your career, and many other factors help you to live life to the fullest.

Retirement Plan Considerations - It's Not All About Money

In a recent study on ageing the Irish Longitudinal Study on Ageing (TILDA), is a large-scale, nationally representative, long-term study on ageing in Ireland. It collects information from adults aged 50 years and over resident in Ireland and is one of the most comprehensive research studies of its kind both in Europe and internationally. TILDA’s Vision is to make Ireland ‘the best place in the world to grow old’ by studying the health, wealth and quality of life aspects of ageing. We thought this research was definitely worth sharing with you.

Four waves of research with over 8,000 people have been completed since the launch of the study in 2006. So what can we learn from TILDA to help us live a more fulfilled life in retirement?

Retirement is not the end

Quality of life peaks at age 68 – this is when life is at its best! TILDA found that people aged 80 enjoy a similar quality of life as people aged 50. It’s only from age 80 onwards that quality of life starts to decrease.

Social participation is really important

Increased social integration, through maintaining a larger social network and positive supportive relationships with friends, is associated with higher quality of life. Similarly volunteering and participating in both active and social leisure activities lead to happier lives as you get older. So keep participating in your golf, bridge, or amateur dramatics!

Your living conditions are important

Independent living is an important goal for many people as they age, you want to stay at home. The condition of your home plays an important role in this. As your finances allow, make your home as easy and comfortable as possible to live in. For example, keeping your house warm has a big impact on your quality of life.

Stay strong and fit

advice firsy retirement plan considerationsGive yourself every chance for a long and happy life. Start exercising today, and then keep it up! It will pay off in the long run. Frailty is a common condition in Ireland but is not inevitable and can be avoided, delayed, and even reversed. The keys to this are staying active, avoiding falls, staying socially engaged, and good nutrition.

There’s loads more brilliant content that is relevant to life over age 50 at Simple changes in both your actions and outlook can go a long way. When you add to this our advice to help you with your financial outlook in retirement, you stand every chance of your later years indeed being your golden years.

Bringing retirement into focus

In a report conducted by Standard Life “Bringing retirement into focus 2022” they conducted a study exploring the behaviours and attitudes of adults in Ireland as they journey to and through retirement.
The findings highlight that owning a pension not only has a significant impact on those planning for and living in retirement, but it also positively influences a person’s emotional well-being regardless of age.
Pension owners, across all generations, are less likely to feel anxious about their current financial position than their non-owner counterparts. Pensions are a powerful vehicle to have on the road to retirement and they help to build confidence in tougher times too.

In this report there is an abundance of evidence to support the need for retirement planning across three pillars:

  1. financial planning,
  2. staying socially connected
  3. and being mentally prepared for retirement.

Many of the retirees regret not giving more time to consider the change ahead and how they would adjust to this phase of their lives The journey to a more meaningful retirement can only be achieved by taking a more rounded view.

The research points to gendered attitudes that might be affecting how women and men approach the broader aspects of retirement.

More than half (55%) of women are looking forward to retirement compared to 38% of men. In contrast, 35% of men find the idea of retirement unappealing compared to 26% of women.
Women also appear to have a firmer idea of how they will spend their time in retirement.

Some other findings

  • 42%  of women feel uncomfortable talking about money with family or friends
  • 41% of private pension owners feel positive about their current financial position
  • 33% of retirees in Connaught/Ulster are spending retirement volunteering or doing unpaid work
  • 45%  of Baby Boomers (58-76 years) see retirement as a time to explore new ways of fulfilling their potential
  • Attitude to Retirement

What is retirement?

Interestingly, it appears the younger generations are more likely to hold a sedentary view of retirement than their elders. Having just started their working lives, 38% of Gen Z view retirement as their time to stop work and put their feet up.

Conversely, those closest to retirement age show a significant reluctance to stop and instead, they appear to be redefining retirement to suit their values. The majority (55%) of Baby Boomers see it as not an end to their working lives but a time to create their own pace. Almost as many (45%) see it as a time to explore new ways of fulfilling their potential which is a sentiment shared by over a third (35%) of Gen Xs.

A rounded view of retirement

It’s clear that retirement continues to mean many different things to different people. Despite the uncertain economic climate, the majority of people continue to look forward to retirement. However, there are several characteristics that continue to significantly alter the retirement journey for many people across Ireland. These must be considered in your retirement plan,

The emotional value of pensions

Inertia is a long-standing problem for pensions. There are several reasons for pension inertia but one of the most common is the inability to connect with our future selves.
It’s hard to commit today’s hard-earned money to the future and a self you can’t yet identify with when you have present-day needs.

This is further compounded in today’s climate where many are experiencing financial stress.

As might be expected, owning a private pension brings added comforts to those planning for and living in retirement. Retirees with a private pension feel happier in retirement than those without and are also less likely to have adjustment difficulties or have regrets.

Most interestingly, the Standard Life report also shows that owning a private pension affords a greater chance of everyday emotional resilience regardless of retirement status.
By owning a private pension, people are less likely to feel anxious today about your financial position and that is of profound significance in volatile times.

One of the participants of the research said ‘Once you have the financial monkey off your back the possibilities are endless’.

Retirement is not an end; it’s your Second Life

Although we still call it retirement, what’s happening in this phase of your life is rapidly changing. The closer we come to retiring, the further we move from the idea that this will be a time to stop work and put our feet up. We are living longer, healthier lives and so retirement is more active than ever before.

Whether it’s learning new skills, visiting new places, or continuing some form of work, keeping busy in our Second Life is more important than ever.
The retirement experience is very personal, but one universal truth prevails – planning financially, socially, and mentally for your Second Life opens a life of possibilities.

Get Advice

If you have questions or concerns on your existing plan, don’t hesitate to get in touch.

Talk to us now and make an appointment with one of our Letterkenny team of Advisors. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 910 3938.

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If you have questions or need advice on Retirement Plan considerations in Donegal, call 074 910 3938 or email now.

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