One of the biggest surprises in retirement isn’t the extra time it’s the long, stretch without a regular income. If retirement now spans 25 to 30 years for many of us, that’s an entire second adulthood without a paycheque. And yet, many people still plan as if retirement will last a decade or less.
This gap in planning is one of the biggest threats to well-being
in later life. A longer retirement requires not only more money, but a very
different approach to managing it. It's no longer just about saving, it’s about
making your money last, and knowing how your needs will change across three
decades.
Consider this: A person who retires at 65 and lives to 95 will
need to support themselves for 30 years. That’s as long as many people spend in
the workforce. And during those years, expenses may shift, from travel and
hobbies in the early years to increasing health costs later on.
The traditional retirement model, relying on a combination of
employer pensions, government benefits, and personal savings, is showing signs
of strain. Employer pensions are less common than they used to be. Government
benefits provide a base, but not enough for most people to live on comfortably.
That puts more pressure on individual savings, which many people find difficult
to build.
So, what can be done?
1. Start early, but it’s never too late. While
saving in your 30s and 40s is ideal, people in their 50s and even early 60s can
still take meaningful steps. That might include downsizing, reducing debt, or
boosting retirement contributions during peak earning years.
2. Think beyond the nest egg. Generating
income during retirement can mean more than withdrawing from savings. It might
include part-time work, renting out part of your home, or turning a hobby into
a small business. Retirement income today is often a mix of sources.
3. Plan for three stages of retirement. Early
retirement (age 60–75) may include active travel and lifestyle spending. Middle
retirement (75–85) might see a shift toward home-based activities. Late
retirement (85+) often involves more medical care and support services.
Financial planning should reflect this evolution.
4. Protect against inflation and rising costs. A dollar
today won’t go as far in 20 years. Consider financial products and strategies
that can keep pace with rising costs over time.
5. Get help. Many people find retirement
planning overwhelming. A trusted financial advisor can help you map out your
options and understand how to stretch your resources.
Retirement isn't just a destination, it’s a journey, and one
that requires resources, flexibility, and a bit of strategy. The earlier you
begin thinking about what 25 or 30 years without a regular income looks like,
the better your chances of making it a fulfilling, financially stable stage of
life. I started looking at this when I was in my late 40s, I should have
started in my 20s but life happened and I finally got around to this, but I was
late. My advice is to start now, no matter what age you are.
And here's the good news: retirement planning isn't just about
scarcity, it's also about freedom. With thoughtful planning, those years can be
among the most vibrant and meaningful of your life.
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