It seems to defy conventional wisdom, but could you be financially better off retired than working?
For the Baby Boomer generation at least, some new research has discovered that this will be the case for many.
According to the research by the Institute of Fiscal Studies (IFS), more than eight in ten Baby Boomers will be financially better off in retirement than they were during their working lives.
In most cases, the IFS found that middle class couples were in a more financially advantageous position when they stopped working and entered retirement.
84% of people in their 70s had accumulated sufficient wealth during their lifetime to sustain or improve their standard of living in retirement. This assumes the value of their property was taken into account.
They were able to replace at least two-thirds of their annual income from employment with income from state, occupational and private pensions in retirement.
Because many Baby Boomers experience much lower expenditure in retirement, they were better off financially in retirement.
Commenting on the research, an IFS spokesperson said:
“The large majority of couples reaching state pension age in recent years have more wealth than necessary to maintain their standards of living into retirement.
“This is a cohort that has, as it has turned out, ended up saving more than they needed for retirement.
“The picture for future generations, however, may look quite different.”
Would you enjoy a better standard of living in retirement than the one you can afford whilst working?
We often find that many new clients simply don’t know the answer to this question.
Financial Planning enables them to know definitively whether they can afford to retire and will help ensure you never run out of money during your lifetime.
In many cases, we can demonstrate that retirement today (or much earlier than originally planned) is both affordable and sustainable, giving peace of mind around making such an important decision.
Do get in touch to arrange an initial meeting, which is at our expense and with no obligation, to start the process of finding out whether you can afford to retire tomorrow.
