AEGON research reveals the changing face of retirement

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The age of the ‘grandad-olescent’
– adventurous ideas require careful financial planning

* 61% expect to either carry
on working in some capacity after they reach retirement age or pursue further
education or charity work
* 42% have no clear idea what income they will have in retirement
* 87% want some form of guaranteed income in retirement
* 22% fear running out of money in retirement.

A Aegon research reveals a significant
shift in the way 50 to 65 year-olds are viewing retirement, showing how role
models such as Harrison Ford and Madonna are turning the ‘baby boomers’
into a generation of ‘grandad-olescents’.

Less than one in three (29%) says
they intend to stop working when they reach retirement age despite the vast
majority believing they would at least “get by” financially if they
were to do so. But are these expectations grounded in reality and what financial
needs will this generation have in retirement?

AEGON surveyed over 2,000 people
between the ages of 50 and 65 to gauge their attitudes towards retirement and
to see what sort of financial provision they have in place. The study shows
retirement in the ‘noughties’ is becoming a second adolescence,
and is more likely to include flexible working or a new career, than a carriage
clock and a pair of slippers.

The survey reveals that 61% expect
to carry on working in some capacity after they reach retirement age or pursue
further education or charity work – and, for most, not because they have to.
More than one in ten (11%) said ‘love of the job’ made them want
to stay in the work force while 14% argued that they were simply ‘too
young’ to retire. 12% said they would like to try out a completely different
career in their retirement.

Thanks to exceptional social and
economic factors, ‘baby boomers’ should be in a better position
financially to enjoy retirement than any previous generation. In fact, 42% think
they will be better off than their parents in retirement.

However the report highlights a significant
knowledge gap when it comes to planning, as 42% of respondents have no clear
idea about how much income they will have in retirement. 44% expected to receive
an income less than £15,000 a year and only 14% thought their pension
savings would produce more than £15,000 a year.

Interestingly, 33% are relying on
their pension alone, with no other savings or investments. While these figures
wouldn’t seem to indicate a comfortable retirement, 86% say they would
at least “get by” financially if they were to stop working at retirement
age with only 14% saying they would struggle to cope financially. This may be
because 47% of respondents don’t expect to have a mortgage or other outstanding
debts at retirement.

Perhaps understandably in these times
of rising prices and falling stockmarkets, securing a guaranteed income during
retirement is at the top of the wish list, with 87% of respondents saying this
is most important to them. Running out of money is a concern for one in five
people (22%) questioned.

Rachel Vahey, head of pensions development,
says:

“Retirement isn’t the
abrupt cliff edge it once was and, for many of today’s ‘baby boomers’,
retirement age marks a new and exciting chapter of their lives. But if you want
to make adventurous life choices and have a more flexible approach to retirement
you have to know what income you’re on track to receive and plan carefully.

“Today’s retirees have
to deal with the fact that people are living longer and stockmarkets are more
volatile. Running out of money is a big fear factor and many people want the
security of a guaranteed income. The good news is there are more products and
solutions available now to complement people’s changing lifestyles. So
making the right choices is more important than ever.”

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Click here for the full report
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