Most Savers Underestimate How Much They Need To Save For Retirement
Eighty percent of savers underestimate how much money they need to save in order to fund their retirement, a new study from Scottish Widows has shown.
Part of the disconnect between expectations and reality may lie in pessimism about life expectancy. The study shows that most people expect to retire at the age of 65 and live to the age of 82, despite the UK average life expectancy now being 87 years. This pessimism continues even after financial advisers inform clients of the need to plan for longer life expectancy. Only 46% of clients revise their plans accordingly, with the rest assuming they will not benefit from the raised life expectancy.
“One in ten of us will now live to be 100 years old,” explains Douglas McCrea, founder of McCrea Financial Services, “so we need to reflect that in the plans we make for our retirement.”
“It’s more likely than ever that we’ll enjoy a long retirement, and the earlier we put plans in place to fund it, the happier and more worry-free that retirement can be.”
With 77% of savers already worried that their pensions will be insufficient to fund their retirement, Douglas advises people to get in touch with McCreas for a free, no obligation consultation on their retirement plans.