Retirement is possibly the time when the fruits of financial planning are demonstrated most clearly. If a good financial plan has been executed, one can have adequate financial resources for a desired lifestyle. However, the lack of financial planning can lead to living out your years with great difficulty. Whatever the result, it is extremely difficult to fix poor financial planning after one retires.
What Has Happened to the Pension?
Very few retirees can rely on a pension for a life of comfort. This may have been the rule for the generation born before the 1950s. The virtues of lifetime employment and saving were reaped in the form of a gold watch and an adequate pension. People saw no need to enlist the help of a certified financial planner (CFP). Investment was something reserved for the rich and famous.
The baby-boomers born in the 1950s and 60s, are now reaching retirement age. They may have pursued a consistent profession, while often changing jobs to promote their careers. This often meant cashing in- or losing out on accrued pension benefits.
Retrenchment and job losses became more common in the early 1990s. It meant that many severance packages included pension contributions. Instead of investing the money under the advice of a CFP, it was most often spent on survival, or luxuries. Whatever the reason, the lump sum payout and monthly pension cheques are mainly a thing of the past.
The financial consequences of life at work have not been favourable for retirement. Most baby boomers have not made adequate savings or investments to provide for life after the age of 65.
Pension funds have also acquired poor reputations. They used to be very safe from an investment point of view. Now some have gone bankrupt, while others have collapsed due to fraud.
StoneHouse Capital point out: “your actions today will impact dramatically on the financial lifestyle you will enjoy in the future.†1 This is why people are urged to seek quality financial advice, and take responsibility for their own financial destiny.
Scary Statistics
Life expectancy and Longevity
The United Nation’s research2 shows that the average life expectancy has increased considerably over the past fifty years. Worldwide life expectancies are currently above the traditional retirement age of 65:
 Devloped regions: 77.1 years
 Less developed regions: 65.6 years
Gender Differences
Women are still expected to outlive men:
 Developed countries: women live approximately 6.9 years longer than men
 Less developed countries: women live approximately 3.7 years longer.
 Least developed countries: women live approximately 2.5 years longer.
Apart from these age-related gender differences, other issues make retirement planning for women not only more difficult, but also more important. The Wall Street Journal 3 points out that women are still more likely to earn less than men during their careers. They are also more prone to experience career interruptions. Families where women are either sole income earners or make critically important contributions to the family, income are also increasing.
Is Retirement Age a Fading Concept?
Financial Advisors are aware that statistics indicate a very strong likelihood that this is so. Other reasons are also blurring the idea of retirement age. On the one hand there is a tendency to drive retirement age down. Many companies and governments are forcing employees to retire earlier.
On the other hand, you have the views reflected by a Wells Fargo & Co news release4. It states that “80 is the new 65 for many middle class Americansâ€. Although the report specifically applies to Americans, it is a reflection of what is happening in more developed countries. Longevity and improved health make people more capable of being productive income earners after official retirement. Many people simply don’t want to give up working, either for the sake of practising a much loved profession, or the necessity of earning an income in order to survive.
The facts point to the simple truth that people will live longer, and may most likely have to do so at a reduced standard of living. This need not be the case. The use of financial advisory services like those offered by the Partners at StoneHouse Capital can greatly improve chances of achieving a desired lifestyle during retirement. It is most important to do this sooner rather than later in life.
What Has Happened to the Pension?
Very few retirees can rely on a pension for a life of comfort. This may have been the rule for the generation born before the 1950s. The virtues of lifetime employment and saving were reaped in the form of a gold watch and an adequate pension. People saw no need to enlist the help of a certified financial planner (CFP). Investment was something reserved for the rich and famous.
The baby-boomers born in the 1950s and 60s, are now reaching retirement age. They may have pursued a consistent profession, while often changing jobs to promote their careers. This often meant cashing in- or losing out on accrued pension benefits.
Retrenchment and job losses became more common in the early 1990s. It meant that many severance packages included pension contributions. Instead of investing the money under the advice of a CFP, it was most often spent on survival, or luxuries. Whatever the reason, the lump sum payout and monthly pension cheques are mainly a thing of the past.
The financial consequences of life at work have not been favourable for retirement. Most baby boomers have not made adequate savings or investments to provide for life after the age of 65.
Pension funds have also acquired poor reputations. They used to be very safe from an investment point of view. Now some have gone bankrupt, while others have collapsed due to fraud.
StoneHouse Capital point out: “your actions today will impact dramatically on the financial lifestyle you will enjoy in the future.†1 This is why people are urged to seek quality financial advice, and take responsibility for their own financial destiny.
Scary Statistics
Life expectancy and Longevity
The United Nation’s research2 shows that the average life expectancy has increased considerably over the past fifty years. Worldwide life expectancies are currently above the traditional retirement age of 65:
 Devloped regions: 77.1 years
 Less developed regions: 65.6 years
Gender Differences
Women are still expected to outlive men:
 Developed countries: women live approximately 6.9 years longer than men
 Less developed countries: women live approximately 3.7 years longer.
 Least developed countries: women live approximately 2.5 years longer.
Apart from these age-related gender differences, other issues make retirement planning for women not only more difficult, but also more important. The Wall Street Journal 3 points out that women are still more likely to earn less than men during their careers. They are also more prone to experience career interruptions. Families where women are either sole income earners or make critically important contributions to the family, income are also increasing.
Is Retirement Age a Fading Concept?
Financial Advisors are aware that statistics indicate a very strong likelihood that this is so. Other reasons are also blurring the idea of retirement age. On the one hand there is a tendency to drive retirement age down. Many companies and governments are forcing employees to retire earlier.
On the other hand, you have the views reflected by a Wells Fargo & Co news release4. It states that “80 is the new 65 for many middle class Americansâ€. Although the report specifically applies to Americans, it is a reflection of what is happening in more developed countries. Longevity and improved health make people more capable of being productive income earners after official retirement. Many people simply don’t want to give up working, either for the sake of practising a much loved profession, or the necessity of earning an income in order to survive.
The facts point to the simple truth that people will live longer, and may most likely have to do so at a reduced standard of living. This need not be the case. The use of financial advisory services like those offered by the Partners at StoneHouse Capital can greatly improve chances of achieving a desired lifestyle during retirement. It is most important to do this sooner rather than later in life.
