Whether you're rapidly approaching retirement or are still decades away, you've probably got an idea of what your post-work life could be like. The question is, does it match up to reality? According to research from Skipton Building Society, it may not, and many people are actually far more pessimistic about retirement than they need to be.
The research looked at the retirement expectations of pre-retirees and the reality of retirement from those who have already given up work, and interestingly, there are clear discrepancies. For example, just 34% of pre-retired Brits said they were confident in being able to live the lifestyle they want in retirement, compared with 65% of retired people who said that they were able to achieve it.
This expectation gap is further highlighted by the finding that 39% of retirees believe they're now living the best days of their lives, compared with just 17% of pre-retirees who predict they will say the same once they retire, suggesting that the reality can sometimes be better than expected.
The headline result of the survey is even more marked. The figures show that those who have already retired are nearly twice as positive about retirement as those yet to do so: pre-retirees scored just 3.3 out of 10, compared with 6.1 for retirees, which suggests that "there is a significant gap in expectations between the reality experienced by retirees, and the low expectations and perceptions of those yet to retire".
However, the figures went on to reveal that 32% of pre-retirees surveyed are not looking forward to retirement, while just 28% believe that their standard of living will be as good as that of their parents. This is a feeling that's reflected among those already retired, with only 17% believing that the next generation's retirement will be better than their own, which perhaps suggests a universal view that retirement living standards are going to be harder to maintain in the future.
This in itself highlights the importance of preparation, as does the finding that 79% of those who defined themselves as "happy retirees" took active steps to prepare for their retirement. Of course, those who have achieved the lifestyle they want are more likely to have a DB (defined benefit/final salary) pension, as well as cash-based savings and investments, and while such a generous pension is unlikely to be available to the younger generation, that doesn't mean they have no hope of retirement comfort.
If you're going to stand the best possible chance of having the retirement lifestyle you want, it's all about forward planning. Make sure to sign up with your company's workplace pension scheme, and try to set aside extra savings in a cash ISA (for example) to maximise your tax efficiency and build up a suitable retirement fund.
Hopefully, it'll pay off: 64% of retirees surveyed were able to stop work and retire when they wanted to, and while that may be harder to achieve for today's generation (just 29% of pre-retirees expect to be able to retire on their own terms), a bit of preparation could mean you're closer to achieving that goal.
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