Ready to retire? Not so fast.
There was a time when people looked forward to their retirement, but it is now a time of dread for many senior citizens. Whilst mortgage and rental costs are often lower for seniors, the cost of gas, electricity, lighting and food actually goes up. In January 2009 The Institute of Fiscal Studies calculated that the cost of living for pensioners was rising at 5.4% per annum, compared to just 0.5 per cent for other age groups.
The steeper increase for older people was caused by a higher proportion of their income being spent on food and drink, the cost of which is rising at up to five times the rate of inflation.
Personal income is also set to decrease for the elderly. This can be directly attributed to the falling interest rates and diminishing returns on personal savings. It is only normal that banks, institutions and retirement plans can’t offer the rates they have been for years during the current economic recession. What’s even more troubling is that this drop in income comes when retired people have more time on their hands, and experience a rise in household bills and general outgoings.
It isn’t surprising that many seniors have no alternative but to continue working into retirement. Recent research by Lincoln Financial group revealed that 41% of prospective retirees’ believe that they will have to continue working on either a full-time or part-time basis. More worryingly, 11% of people don’t believe that they will have enough money to last them to the age of 70.
Conclusion? Easy, start saving and investing right now!
The cost of living is rising at a faster rate for seniors than for other age groups so it is important that all people save as much as possible for their retirement. Anyone that is already retired should check their state benefits entitlement as there is a strong possibility that financial assistance is available.
