Did your holiday reading change your life?

Did your holiday reading change your life?

The darker and chillier mornings have brought a stark reminder that we’re all back to reality after the summer holidays.

And I suspect any plans you may have dreamed up while away from the workaday world are fading fast?

Holiday reading often sparks the notion of different lives, even for those of us that enjoy what we do.

Most of us, sitting in a deckchair with cool drink in hand have harboured all manner of bizarre schemes, while half glancing at a book or staring across a stunning landscape.

But when it comes to it, running that little bistro or olive grove in a country we can barely order a meal in, or taking a later life gap-year we feel was denied us in our youth, isn’t really a viable option.

Most of us, instead, return a little more refreshed to the life we already have.

And probably a good thing too, if we’re any good at the work we do for people.

Amongst my holiday reading (unintentionally, I may add!) was June’s copy of the Harvard Business Review (HBR). Not a conscious choice for someone who likes to lose themselves in a good novel.

Somehow finding it’s way amongst my packing, an article entitled “Next-Gen Retirement” did catch my eye though. A strange but thought provoking read that I’d like to share with you.

Whether retirement is in your sights, or some way off yet, this is some reading that could just change your life.

And don’t turn away if you are retired already. If your retirement is not going the way you’d like it then the findings may also help you re-work your approach.

Though the research was carried out amongst management executives of US companies, the findings are just as applicable in the UK.

It found that executives in their fifties and sixties use different metaphors to describe their post-career plans. Here are some of the most common:

Loss – a lack of purpose, a fear of being forgotten or a threat to your identity
Renaissance – a new beginning, a new chapter, or a “blank canvas” offering possibilities to pursue your interests or passions
Detox – the “cleansing” experience of getting away from an unhealthy, stressful working life.
Liberation – Being released from the constraints and restrictions of work: running toward a newfound freedom
Downshifting – gaining time through the transition to a slower pace of life
Staying the Course – continued engagement and contribution; using your professional skills in different settings
Milestone – reaching a pinnacle and achieving a goal; a marker of the end of one phase and the beginning of another
Transformation – a positive adaptation to a new role or lifestyle; taking on a new identity.

Do any of these strike a chord with you?

The research also revealed that people grow into retirement and their perspective on it may change as it evolves.  Some, who initially relish the freedom to do little may move into another mode if it turns into boredom.

A key aspect of retirement they concluded, was versatility.

That’s fine and I doubt many would disagree with that, but you’ll have a hard job being versatile if you’re constantly worried about money.

I have found in the course of my work the Number 1 fear that people have about retirement is not boredom or their ability to change things.

It is running out of money.

This fear affects rational people from all walks of life.

High achieving lawyers, accountants, business owners and other professionals are not immune.

Coupled with an end to secure corporate and government pensions, there is only one solution:

You have to take matters into your own hands.

Building a sizeable pension pot is the best security you can have.

But it needs managing for growth before and during retirement.

Yes, any decent adviser should aim to continue to grow your pension fund while you draw from it.

Some play ultra cautious, putting large chunks of their clients’ pensions into cash.

They fear the volatility of the stock market, and see threats to their clients’ retirement wealth.

In fact, inflation is the real enemy.

Let me repeat that.

Inflation is the real enemy of your savings.

We have become accustomed to low inflation over recent years, but economists are warning that could change in the next few years.

The effects of weaker sterling, interest rate cuts and the Bank of England’s stimulus package could conspire to increase prices across the UK economy.

In fact, Deutsche Bank are projecting that UK inflation could reach a 25 year high of 5.2% in the next three years.

And even on the lower end of the range it is still predicting Consumer Price Inflation (CPI) rising above 3% within that timescale.

What is the answer, you may well ask?

Well, just as keeping our bodies active helps our longevity, keeping our money active can make it last longer too.

Your investments shouldn’t be given an easy time lounging around in cash or deposit accounts. The paltry interest you’ll receive simply won’t keep pace of rising prices.

Lazy money leads to a steady erosion of your spending power.

Active fund management, by contrast, across a range of asset classes such as equities, bonds and fixed interest will position you for growth.

And consider this: Longevity statistics show that more than half of today’s 60 year olds will live to at least age 90.

That means you’ll need to prepare for your pension income to last for as long as the period you grew it.

Back to the article “Next-Gen retirement”. What’s your approach going to be?

If you have the feeling your pensions and investments may not be positioning you for a retirement full of options, then it’s never too late to take action.

Most things begin with a conversation. Let’s start one now.

I’m here to help on 0121-355-4455 or drop me a line to helen@oaklandswealth.com

Kind regards,