The importance of retirement planning

Life expectancy has increased dramatically over the last 50 years. Retirement can now last several decades. And yet many people almost drift into it.  A video on the Bloomsbury Wealth YouTube Channel.

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Transcript: Robin Powell & Justin King/ Retirement expert

RP: Life expectancy has increased dramatically over the last 50 years. Retirement can now last several decades. And yet many people almost drift into it. Justin King is a retirement planner, podcaster and author.

JK: We drift into being a little overweight, we drift into not being so fit as we want to be. Sometimes our relationships can drift. Life is a bit like that and, of course, this retirement phase… you know, if you arrive at your retirement date – whatever date that is that you choose – and you just go, “Right, I’m ready for this. I planned for this. I know what to expect. I know what I’m going to do. I just can’t wait for this period of my life.”

RP: Working out when to retire isn’t necessarily easy. Some people choose to retire and never work again. Others work part-time and wind down gently. Either way, Justin says, it’s vital to have a sense of purpose.

JK: To have purpose any time in your life is hugely important. Possibly though, of course, we have a wonderful opportunity to be really purposeful about this stage of life because we are no longer shackled to a job that, possibly, didn’t really stimulate us or fulfil us. It may have been that that is the case, but it may not have been. There’s an awful lot of people you can talk to who are dreading Monday morning and, if that is the case, I want you to then go, “Let’s make sure this period of life is wonderful for you,” and that’s going to take some planning. And also have a conversation about what would be really fulfilling? Because that’s what you really want in life: you want to be fulfilled!

RP: For most people, the key question is this: how much money do you need to enjoy the lifestyle you want in retirement? But it’s not a simple calculation.

JK: We only know history. We don’t know the future. We don’t know what interest rates are going to be, we don’t know what inflation is going to be, we don’t know what investment returns are going to be. We know so little, it’s quite amazing that we can call ourselves retirement planners, with all honesty! We don’t know how long someone’s going to live. So we’ve got all these vagaries to deal with. What we can control, of course, is how we live our lives – what we’re spending – and also possibly be really conservative with our approach of what our expectations are likely to be, what our investment returns are likely to be, to be quite negative or pessimistic about inflation. You know, you put it all in a spreadsheet for 30 years and, as an ex-pilot and an ex-sailor, you get your course wrong by one degree and you end up in totally the wrong place if you keep on that course for a long period of time!

RP: It’s precisely because retirement planning is so complex that it’s crucially important to seek professional advice — and preferably ongoing advice. Our needs and circumstances can change quite quickly in later life. Having a planner we can turn to when they do is extremely valuable.

Disclaimer — The information in this video does not constitute advice or a recommendation, and you should not make any investment decisions on the basis of it. If you do however require advice please do not hesitate to contact Bloomsbury Wealth.