It’s a gloomy outlook for people approaching retirement right now, with many being forced into ‘semi-retirement’. What’s the answer? For a start, parents should put their own needs before those of their grown children.
People nearing retirement can’t seem to get a break these days. If they’re planning on giving up work in the very near future, the main way of buying an income for their later years (through an annuity) looks highly unattractive at the moment.
Rates continue to plummet – 15 years ago, a man aged 65 with retirement savings of £100,000 was able to buy an annual income of almost £11,000. Now, £100k will get you just £6,000.
Seventy-somethings are staggering retirement
It doesn’t get much better for anyone with a few years to go until that point. The wildness of the stock markets over the past few years has wiped billions off the value of people’s pension pots.
Traditionally, as you wind down your savings towards retirement, you move your money out of the stock market into safer investments. Millions of people doing this would have had to eat the losses on the markets by doing so.
It’s no surprise, then, to see more and more people staggering their retirement. A survey carried out by retirement planning firm Heartwood found that 40% of people over 50 are now looking to delay their retirement for at least five years. And it’s not for the love of work. Oh no, it’s simply because they don’t think they have enough cash to have a comfortable life in their later years.
Interestingly, many people said that they need to carry on working to support their older children who have since flown the nest – either by paying off student debt, paying for weddings, or giving them a hand up onto the property ladder. So, a continued push of more work, followed by semi-retirement, is the prospect many are facing well into their 70s.
Parents shouldn’t be burdened by our debt
I’m one of those kids probably giving my dad that very headache. Five years out of university, I still have an enormous loan to pay off and I’m with thousands of others in London battling to get some cash together to buy a house.
Of course, I’d love some help. But my dad only has a limited time left to get some money together for his impending retirement. At 26, I’ve got at least 40 years to save for my later years, as well as time to scrape together a deposit. Should I be burdening my old man with my needs when his outlook is far less rosy?
My generation have got one hell of a fight to walk the financial path our parents did. Should we be expecting them to make even more sacrifices to help us get there? I don’t think so but I’d like to hear what you think.
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