What is your biggest worry about retirement?
For many people, it’s the fear of running out of money before the end of their life.
New research by Alliance Trust Savings has confirmed this fear.
In a survey of over 1,000 retail investors, they asked what is your single biggest worry about your long-term financial future?
Nearly a quarter of respondents said it was not having enough money, while a further fifth said it was their health and high cost of funding care in later life.
The risk of high price inflation eroding the buying power of savings was a major concern for 9% of respondents.
6% feared Government meddling in the form of further changes to pensions or taxation.
A lucky 8% had no concerns at all about their financial future.
Brian Davidson, Senior Pension Proposition Manager at Alliance Trust Savings said
“As we’re all living longer, planning how to fund our lifestyle once we’ve finished working is a serious consideration, especially as the pension landscape has moved away from state provision and corporate final salary schemes to place more emphasis on individual responsibility through personal and employer contributions.”
An important part of the work we do as Financial Planners is helping clients understand whether they are likely to run out of money during their lifetime.
We use a process called lifetime cash flow forecasting to visually demonstrate whether or not this is likely, based on planned income and expenditure projections and a number of reasonable assumptions about the future.
This lifetime cash flow forecasting can help to remove the worry about running out of money during retirement.
Where it shows that cash flow is likely to run dry before the end of life (we start with the assumption that our clients will live to age 100, although this can be altered depending on health and family experience of longevity), we can make recommendations to help money last for longer.
Our Financial Planning often considers a number of different scenarios, each designed to demonstrate whether or not our clients will run out of money during their lifetime.
If your biggest financial fear about later life is running out of money during retirement, then Financial Planning is a particularly valuable exercise to undertake.
Do get in touch to find out more and take a look at some examples of our lifetime cash flow forecasts.
[tweet_box]Running out of money in later life is the biggest worry for nearly a quarter of retirees.[/tweet_box]
