Basic steps for savvy retirement saving

How will you spend your time when you stop working? By deciding what kind of retirement you want, you can start savvy saving now.

What does retirement mean to you? Do you see it as the end of something, or will it be the start of something new? Will you be happy to wave goodbye to your job, or would you prefer to continue working? Maybe you plan to spend more time with your family, or to take advantage of the opportunity to travel?

There has never been a one-size-fits-all retirement, which is more true now than ever before – as there are multiple options available to retirees than there were in previous generations. Not only is life expectancy longer than it used to be, but we’re staying fit and active for longer – you’ve heard that 60 is the new 40, right?

So, back to that question: what does retirement mean to you? Finding the answer to it is the first step in making it happen. With an idea of how you want to spend your retirement, you can then start to work out how much income you’ll need to make it happen. We all work better when we set a goal – it’s human nature – so picture your ideal retirement and then it should be easier to save for it.

Not sure where to start? From our recent survey, it’s clear that you’re not the only one. Here are some ideas to help you work it out, and get an idea of what kind of income you might need:

  • Will you need to ‘do’ something? More people are working in ‘retirement’, either through choice or necessity, but that doesn’t necessarily mean sticking with what you’ve always done. It could mean starting your own business, finally doing that part-time job in a bookshop you’ve always fancied, or taking on some voluntary work.
  • Will you stay where you are or do you want to live somewhere else? If so, will you downsize and free some money tied up in the house, or do you want to live somewhere that’s more expensive?
  • Do you want to learn something new, or spend more time enjoying your hobbies?
  • Do you want to travel? If so, where to and how often?
  • Do you want to be able to help out your children, whether financially or by providing childcare for your grandchildren?

Working out the answers to these questions should help you start to create a clearer picture of the retirement you would like to enjoy. You need to know what that goal looks like! To help you work out the income you will need to fund it, try our handy retirement calculator.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.

Should you carry on working past retirement age?

Our recent retirement survey showed that many people were planning to work past retirement age, so should more of us be considering this route?

According to Ros Altman, the pensions minister, the answer is a definite yes. She sees the traditional idea of retirement as a complete break from work as outdated and thinks we should be looking at it as a phase of ‘less’ work instead.

“The traditional idea of stopping work as soon as you reach a ‘pension age’, whether that be state pension age, or the age at which a private or company pension starts, is now out of date,” she has said. “There is no official ‘retirement’ age anymore, even though many commentators refer to the State Pension age as a ‘retirement age’”.

There’s much evidence that working later in life is an increasing trend, and our survey certainly backs this up. It looks like there’s a shift away from a standard retirement age and towards whatever becomes practical.

And this might not be a bad thing at all: aside from the obvious financial advantages, research suggests that continued employment (as long as you’re healthy) is good for our health and wellbeing. A report by the Institute of Economic Affairs showed that depression and physical decline are more likely in retirees than those who continue working, and the negative effects increase as the number of years in retirement increases. At the same time, the benefits of playing an active role in society and being mentally active in older age are widely known.

Find out more: Are over-65s choosing to stick with the 9-5?

There are more than a million workers aged over 65 in the UK. This number has increased by more than a third since 1995, but that’s nothing compared with the change coming our way in the next couple of decades.

According to a YouGov survey in January 2015, nearly half of over-50s intend to work past 65, with only 15% of non-retireds saying that they wanted to stop work altogether at that age. That means nearly 5 million over-50s intending to work past 65. The survey also revealed that nearly two-thirds of over-50s don’t believe that working full time then stopping altogether is the best way to retire; there’s a preference for scaling back to part-time work first.

Could there be a retirement revolution under way?

Find out whether you have enough money to retire with our handy retirement calculator or take a look at some top tips for boosting your income, whether you decide to keep working or not, with our handy guide.

This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.