It was one year ago on 11 March that the World Health Organisation characterised the Covid-19 outbreak as a pandemic. Residents in many countries around the world are still living under restrictions on their movement and social contact introduced around this time last year.
These restrictions combined with more free time have given people the time to look more closely at their finances and consider their retirement options. As a result of the pandemic and the related restrictions we have seen a number of people who are:
- Realising that they have not saved enough to keep up their hobbies and doing the things they want to in retirement.
- Bringing forward their retirement plans, after having a taste of life after work.
- Choosing to take a phased retirement, taking advantage of flexible working options that the pandemic has made more widespread.
- Being force into retirement because of the economic changes over the last year.
- Reconsidering whether to relocate or not, including a possible return to the UK.
Are you saving enough for your retirement?
Many people are now realising that they are not saving enough for their retirement. The restrictions have been a sharp realisation of what life without travel and leisure can feel like, which puts into perspective why saving to maintain your lifestyle into retirement is so important. The earlier you start saving, the easier it will be to fund your lifestyle after you stop working. Speak to us about your plans for retirement and we can help you understand what you need to save and how to achieve that.
Are you considering retiring earlier than planned?
For many people close to retirement, the pandemic has been a taster of what retirement may feel like and has led them to bring their retirement plans forward. We can help you understand what you could expect to earn each year from your current assets and help you understand when you can give up work with the income you need to enjoy your retirement.
Would you like to retire gradually?
Flexible working options and working from home have become much more common across the world throughout the last year as offices have been unable to open. Some people close to retirement have found that they would be happy to continue working longer without long commutes into city centre offices. Companies have also been more open to flexible working and in some cases, this would allow people to gradually reduce their working hours as they approach retirement. The question facing those in this situation is how can I replace the income from work with my savings and how much can I afford to reduce my income by?
Have your working hours reduced, or have you been forced to retire early?
While the changes in working patterns have created options for some people’s retirement, the pandemic has also led to a reduction in contracted hours and income. The International Labour Organisation’s estimates that 8.8% of global working hours were lost in 2020 relative to Q4 in 2019 which is the equivalent to 255 million full time jobs. Working hour losses in 2020 were around four times greater than during the global financial crisis in 2009 considering both job losses and reductions in working hours for those who remained employed.
These working hour losses have led some people who are close to retirement age to consider retiring and others who have no prospect of finding a similar job, have been forced into early retirement. In any of these cases, a financial planner can help you develop a strategy to fund your retirement and help you assess what you can afford to spend in retirement and whether you can afford to retire.
Are you considering relocating?
For those who have already retired or who planned to retire in the next year, the restrictions of the last year may have led you to reassess what you want to spend your time doing and who you want to do it with. The last year has led many clients to want to consider moving closer to family, while others have realised that they can connect via video chat and see no need to move closer to family. If you are considering moving to a different country or returning to the UK, it would be beneficial to speak to a Forth Capital financial planner as this may have a significant impact on your financial plan.
How can Forth Capital help?
When you are considering your retirement plans it can be very useful to work with your financial planner to develop a cashflow model. These models can project forward what your finances may look like at retirement and identify if you need to be saving more to fund your retirement plans or if we can recommend a way to make your finances more efficient.
Whether the pandemic has affected your retirement plans directly or indirectly, you may benefit from our cashflow modelling service.
Contact me on [email protected] for more information.