By David Squire, of Armstrong Watson

Last updated at 15:30, Saturday, 20 September 2008

We all know it’s important to plan for retirement and that the State pension isn’t going to be enough to provide the lifestyle we want in retirement.

• Visit the Armstrong Watson website

Older and fitter: An afternoon yoga session at Wigton. People are living longer and staying healthier, but will we all have enough money to enjoy life for 30 years or more after we stop work?

We’re beginning to realise that we will need to pick up the tab for our own retirement.

But the vast majority of us are still not planning well enough.

Britain has a problem. Despite all the media headlines and Government initiatives, there is still an air of complacency and a “let’s put it off until tomorrow” attitude.

This is worrying for one simple reason. We are going to live longer than most of us appreciate.

Another thing we all know – or think we know – is that we’re all living longer.

But few of us realise just how old we could become and what that means for us financially.

Understanding our chances of living to our late 80s and beyond leaves us with one fundamental question – will we have enough money to enjoy the lifestyle we want for what could be 30 years or more after we stop work?

Two things can occur to damage our finances the longer we live.

Firstly, inflation will be constantly eating away at the value of our pensions and other assets, meaning our money will buy us less over time.

Secondly, we can simply run out of money, as we spend our savings, investments and pensions earlier in retirement without realising how much we might need in the future.

Some of us are planning our pensions, but few of us plan for “late retirement”.

This is a period from our mid 70s onwards when our expenses can rise faster than our pension and other income can keep up.

This can happen for various reasons. It could be because we need more help around the home or even nursing care.

In addition there are likely to be unexpected expenses like replacing the roof, health and dental care or financial help for our family.

But these days it’s just as likely to be because we are continuing to lead a more active life.

That could be through travel, work or leisure activities. And with families more spread out around the country, or the world, we’re spending more time and money travelling to be with our children and grandchildren.

And don’t forget our enemy in retirement – inflation – standing at 4.4 per cent in August. It continually eats away at the value of our money over time.

The bottom line is that we need to be better prepared for “late retirement”.

It’s increasingly likely we’ll reach this period in good shape physically and mentally, because of the major changes that are reshaping retirement.

In summary, retirement is getting longer due to the increase in longevity.

It is no longer a period of slowing down as retirees stay more active.

People are becoming healthier due to medical advances and better information allowing us to take better care of ourselves.

The conclusion is that we should be making financial plans now to help us live the lifestyle we desire in the future.

• For more information on planning for your retirement call freephone 0800 195 2161 or email moneymatters@armstrongwatson.co.uk

First published at 05:47, Friday, 19 September 2008
Published by http://www.cumberlandnews.co.uk