Most retiring baby boomers can expect to be “in retirement” for at least 20 or 25 years. Here are the top three challenges that are commonly faced by those entering retirement:
1) Lack of long-term financial resources.
Many people lack the financial resources to finance their dreams of “25 years of fun,” and are postponing planning for retirement in the wake of previous market volatility, rising house prices, job changes and increasing education costs. Often financial advisers hear from clients that they “may have to phase in my retirement because I don’t think that we can afford it yet.” And some people who have retired are realising that, in fact, they can no longer afford to be “retired.” Many have entered their 50s and 60s with mortgages and high debt loads. This trend has been observed over the past ten to fifteen years as increasing numbers move toward their retirement date. Today, New Zealand’s ratio of household debt to income is one of the highest in the developed world (OECD, 2016).
2) Supporting children and parents
Many of today’s pre-retirees face the problem of having children still at home while dealing with ageing parents who also require support. The concept of the “sandwich generation” has become the “club sandwich generation” for some households. In some cases, there are adult children living at home and baby boomers providing care giving for older parents at the same time.
3) Changing workplace environments
The workplace has changed over the past few decades and this will have a significant impact on how retirement is viewed. Not only do we have more women in the workplace, but also there is a significant move toward self-employment, working at an older age and part-time work.
The content from this blogpost is from our book ‘So You Think You Are Ready To Retire’ a self-guide book to prepare you for retirement, you can receive your free electronic version of this book here:
For a made to measure advice around your retirement contact us.