Not having a retirement plan could leave you feeling four times more stressed.
Research from Aegon – the UK's largest investment platform – confirms that almost a third of UK adults don't have a financial plan for their retirement.
People without a plan are four times more likely to feel stressed about their long-term finances than people with a plan. Furthermore, 57% of those without plans worry that they won't have enough money to last through retirement.
Increasing life expectancy and economic challenges force deeper thinking
The Office for National Statistics in the UK calculates that 55-year-old men have an average life expectancy of about 84 years, while 55-year-old women have an average life expectancy of 87 years.
In Singapore, statistics paint a similar picture.
Longer lifespans, inflation, economic uncertainty, and rising healthcare costs are making it increasingly important to prepare a clear plan for your future finances. Having a plan in place could provide much-needed reassurance that you'll be able to navigate both expected and unexpected costs in later life.
Perhaps even more importantly, it can provide invaluable peace of mind and confidence so you can relax and enjoy retirement instead of worrying about your bank balance.
Your retirement plan shouldn't be overwhelming, scary, or strict
Rather than a rigid set of rules, your retirement plan should set out three key things:
- What you have
- What you expect to need
- What you'd like to do
Writing all the facts and figures down will give you more clarity. With greater peace of mind, you can get on with enjoying a more relaxing retirement.
Simply return and review your plan every year to make sure you’re still on course.
6 steps to create a retirement plan to give you peace of mind
Planning for retirement doesn’t have to feel like a chore. Here are six steps to create a plan to give you clarity, confidence, and peace of mind.
Step 1: Know what you have
First, you need to understand where you’re starting from. List your assets, including pensions, savings, investments, and property, plus any debts.
Remember to account for any social security income you might receive. For example, you may be entitled to the UK State Pension.
Read more: UK State Pension Guide for Expats
If you have a partner, team up to review your finances so you both know what you have and can plan your joint future.
Step 2: Consider what you need
Having a realistic view of your future expenses helps you understand whether you’re on track or need to make adjustments before you retire.
Think about what life is likely to cost when you stop working. Everyday expenses like groceries and utilities may stay relatively similar, rising with the general cost of living – but you’ll also need to factor in new costs.
For example, initially, you may want to spend on big-ticket items – extended trips abroad, a new car, or home improvement plans. Alternatively, you may want to make contingencies to ensure you’re able to cover potential care needs in later life.
Read more: How a financial planner can help you work out how much is “enough” to fund your ideal retirement
Step 3: Think about what makes you happy
Planning your finances in retirement shouldn’t be a box-ticking exercise to make sure you can cover the bills – it should be a plan that enables you to enjoy life.
So, spend time thinking about what truly brings you joy. Whether it’s travelling, volunteering, quality family time, or picking up a long-lost hobby, be sure to factor joyful goals into your plan.
As we often tell clients, “Financial planning isn’t just charts and spreadsheets. It’s the freedom to stop stressing about money and start focusing on what matters most.”
Step 4: Write it all down
Putting your retirement plan down in writing makes it more tangible.
No matter what format works for you, people who formalise their plans are far more likely to follow through, and you’ll thank yourself later when it’s time to review.
A study from HSBC Life revealed that 73% of people who have a plan and review it at least once a year said they benefit from average or above-average mental health.
And that’s not all.
Research by Royal London and the International Longevity Centre UK (ILC) in 2017 found that people who took financial advice were, on average, £47,000 better off than those who didn’t seek expert help.
Step 5: Review your plan regularly
Life changes, and your financial plan should too.
Revisit your plan at least once a year or whenever you experience a major life event, such as a career move, inheritance, or change to your health.
Regular reviews also provide the perfect opportunity to ensure your plan remains suitable for your needs and you’re still on the right path.
Step 6: Get professional guidance
Navigating your finances, insuring against the unforeseen, and planning for retirement can feel like climbing a mountain – but we’re here to help.
As the go-to financial planners for individuals and international families with a focus on British, Australian, and Indian clients, we’re well placed to help you create a retirement plan to last your lifetime.
Find out if you’re retirement-ready
Retirement planning for expats can be complicated. To find out how ready you are, take our quiz and see your result now:
Click here if you’re in the UK: https://ascenta.scoreapp.com/
And here if you’re elsewhere in the world: https://ascentav2.scoreapp.com/
