What’s the Right Age to Retire for Your Clients’ Fun & Freedom?

Talking to your clients about the right age for them to retire can – and should – open up a conversation that goes far beyond the mere financial implications of the decision.

Retirement is a deeply personal decision that should take into account physical and mental wellbeing, personal fulfilment, and finances. But it doesn’t have to be a doom and gloom subject. On the contrary, it can highlight the benefits and fun that can come in retirement.

Of course, retirement income will form an important part of the conversation. In some cases, your clients may be delaying retirement due to financial concerns. According to IFA Magazine, over half of people over 55 are worried about running out of money in retirement.

However, there can also be associated issues with retiring late. Saga Magazine reports that studies show working into our early 70s in high-strain jobs can lead to worse physical health and greater depressive symptoms.

Retiring at 60

Deciding to finish work at 60 can be empowering for your clients, as it puts the decision in their hands rather than their employer’s or the state’s.

In particular, those choosing to finish early due to workplace stress can experience an improvement in wellbeing after retirement.

However, according to the Office for National Statistics (ONS), women aged 65 in 2023 can expect to live until they are 88 on average. Men of the same age are expected to live until they are 85.

Retiring early, therefore, could mean almost 30 years of free time to fill. While some adapt very easily to retirement, others find it tougher, so it’s an important conversation to have with your clients.

Retiring at 66

At this point, many of your clients will be able to access full financial entitlements, including their State Pension (although this age is set to increase) and any defined benefit workplace pensions. So, the decision is often a natural one.

However, for some, work offers them a sense of identity, as well as an income. After a long career, retirement can be a shock to the system.

At this age, health is also a consideration. Again, it varies by individual. Some use their retirement time to stay active, while others find that mobility can become more limited.

Retiring at 70

According to the Guardian, there was a 61% increase in the number of people over 70 in employment in 2022.

While for some this could be to combat the rising cost of living, for others it was a meaningful choice.

Age UK has identified six reasons people may continue to work until they are 70 or older:

1. To pay for desirable items, such as holidays.

2. Not ready to stop work.

3. Employer needs their experience, or they are needed in the family business.

4. Due to opportunities to work more flexible hours.

5. To pay for essential items, such as bills.

6. To boost their pension pot.

They categorised the first four as “choosing to work”, while the last two were classed as “forced to work”. For your older clients, establishing their reasons to work later in life is a good place to start. They may simply feel that retiring at 70 will give them a more fulfilling balance than an earlier retirement.

Discussing all these retirement factors with your clients is likely to include several elements, such as the possibility of phased retirement, income, and estate planning.

Retirement living is also a key aspect of your discussions, bringing in the wellbeing benefits of an Independent Retirement Community (IRC), such as enhanced socialisation and engagement.

Talking about the right retirement age with your clients is as much about the “why” as it is the “when”. What are their dreams, aspirations, and long-term goals? For most people, keeping their independence during their later years is important, and IRCs can support this aim within a community of like-minded people.

Although we’ve talked about the pros and cons of retiring at a certain age, the truth is that the best age to retire is the one that best aligns with their individual circumstances. An IRC can bring together aspects of financial security and control, estate planning, health and wellbeing, and independence, offering a holistic approach to later life.

To find out more see: https://www.riverstoneliving.com/advisors