On average, UK women will outlive their retirement savings by 12 years, while men will outlive them by 10 years, according to a recently published report by the World Economic Forum.
In its report, Investing In (and for) Our Future, the World Economic Forum warns that retirement savings will not be able to cover retiree’s lifespans and that women should prepare to bear the brunt of the shortfall, going without retirement savings for two years longer than their male counterparts. It also warns that retirement savers are currently too risk-averse in their retirement investments and that many young to middle-age savers should change their risk outlook, understanding that outliving their savings is a far greater risk to them than short-term investment risk.
Han Yik, Head of the Institutional Investors Industry, World Economic Forum, said: “The real risk people need to manage when investing in their future is the risk of outliving their retirement savings. As people are living longer, they must ensure they have enough retirement funds to last them through their longer lives. This requires investing with a long-term mindset earlier in life to increase total savings later on.”
For retirees who feel that they won’t have enough in retirement savings when it comes to giving up work for good, there are a number of options available. One way of making up the shortfall is to continue working beyond retirement age to increase savings so that they are able to live comfortably for longer when full retirement is taken. Another option is to release equity from property through an equity release scheme, however it should be noted that there are risks involved with this – for more information about equity release read our guide to equity release.
Another option for new retirees to ensure that they get a steady income for life is to purchase an annuity. There are many different types of annuities on the market and the amount of income offered depends on how much is available in retirement savings that can be used to buy an annuity – for more information on annuities, read our annuities guide.
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