As life expectancy increases, it’s becoming more important to think differently about later life. A traditional career of school followed by work then retirement is no longer the path that many people will follow.
A new report from Aegon has shed light on the changing trends and challenges that you could experience after your 50th birthday.
The findings focus on five key areas of life and makes suggestions to help individuals navigate their “Second 50”.
Read on to discover five ways your life could change and develop after your 50th birthday and how you can prepare effectively.
1. A multi-stage life is becoming more likely for many of us
The world of work is changing in many ways, and one of the most prominent changes is the evolution of how we work throughout our lives.
The “job for life” that was once so common is no longer the norm; instead, many of us will experience a “multi-stage” life. This can involve:
- Lifelong learning and training
- Full- and part-time work
- Phased retirement
- Choosing to work for longer or having to take an early retirement due to health concerns or caring responsibilities.
Developments in technology have meant that work can be more compatible with the caring responsibilities that many people may have, particularly as they grow older. And remote and hybrid working is more commonly available since the pandemic, making work more accessible.
This means that you can be creative in thinking about your career, how you’d like it to develop, and when you’d like to stop working.
2. Retirement planning is more important than ever
The increase in life expectancy means you could spend a larger proportion of your life in retirement than earlier generations. As such, it’s vital to plan your finances to ensure you can maintain your desired lifestyle and cover essential costs throughout your post-work years.
This begins with understanding how much you are likely to need to afford your desired lifestyle. Knowing how you’d like your retirement to look means you can work to set enough aside throughout your career to achieve your goals.
The State Pension is likely to form the foundation of your retirement income but remember that the State Pension Age is rising. In 2023/24, the State Pension Age is 66, but this will rise to 67 by 2028, and to 68 between 2044 and 2046. As such, it’s important to ensure you have sufficient income up until you can claim your State Pension.
The report from Aegon also suggests that housing costs could be a key consideration for you in your Second 50. It estimates that 10% of retirees in the UK have outstanding mortgage costs, and others may have rent to pay, both of which need to be factored into your financial plan.
3. Having children later in life can affect your finances in your Second 50
Many people are waiting until later in life to start a family than they have in the past. This can have implications for your finances in your Second 50, as you could be raising school-age children at the same time as supporting ageing parents.
In addition, “blended families” are becoming more commonplace with the rise in divorce rates. This can add complexity, not only to your current finances but also to your estate plan when considering how you’d like to distribute your assets after your death.
With many possibilities available, taking the time to plan your finances can help to ensure that you’re able to support your family throughout your life.
4. Remember to factor in possible later-life care costs
Though life expectancy is increasing, the number of years that you are likely to spend in good health isn’t rising quite so quickly. The report shares that, on average, you will spend 83% of your retirement years in good health.
Despite this, only 25% of people have factored the cost of social care into their retirement planning.
So, having a better understanding of the possible costs you could face and being proactive about saving specifically for this cost could be very helpful.
5. Your Second 50 can be anything you want it to be
The final section of the report considers how to take care of your overall wellbeing throughout your Second 50. This includes your mental and physical wellbeing as well as your financial wellbeing.
With so many opportunities ahead of you, it can be overwhelming to think about what you want your life to look like. By spending time focusing on your goals, dreams, and priorities, you can ensure you build a lifestyle that excites and inspires you.
As well as making time for those activities that bring you joy, this exercise can also help you to plan your finances more effectively. When you know how much your goals will cost to achieve, you can create a plan that enables you to fulfil your ambitions.
Get in touch
If you’d like to learn more about how we can help you to prepare for your Second 50, please get in touch. To find out what we can do for you, email admin@stonegatewealth.co.uk or call us on 01785 876222.
Please note
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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