Thoughts on pensions: How to plan for a life you’ve yet to live
Retirement planning asks us to make some of our longest-term decisions before either the life ahead, or the person we will be in it, feels fully formed.
, head of distribution, Standard Life, reflects of five years of people's responses to questions about their retirement plans
Almost half of us see retirement as something that will simply happen.
In Standard Life’s latest 'Bringing Retirement into Focus' research, 46% of people agreed with that idea. Considering retirement can represent decades of our lives, that can be a difficult statistic to get your head around. Retirement is one of the biggest transitions most of us will make in life, so surely, it should be something everyone wants to plan carefully for?
But listening to people talk about retirement has made us look at that question differently.
For five years, more than 15,000 people have shared their experiences with us through 'Bringing Retirement into Focus'. We’ve heard from people approaching retirement and those already living it: what they expected, what surprised them, what they worried about and what, with hindsight, mattered more or less than they thought it would.
We still tend to talk about retirement as though there’s a clear line between working life and what comes after it. Perhaps for previous generations, that line was easier to see. But what we’ve heard from people is much less clear-cut. For many people today, work may continue in a different form. Family responsibilities carry on. Relationships, interests and ambitions keep evolving.
And the journey to retirement can be just as varied. Careers change direction, families and caring responsibilities evolve, many of us deal with setbacks and what we want from life changes more than once too. The challenge isn’t only that retirement can feel a long way off. Retirement planning asks us to make some of our longest-term decisions before either the life ahead, or the person we will be in it, feels fully formed.
It’s this reality that has helped shape Second Life, Standard Life’s approach to helping people think about and plan differently for retirement. Informed by what people themselves have told us, it looks beyond the pension pot to consider three interconnected indicators of retirement readiness: financial, social and mindset.
And people don’t feel equally prepared across all three. While 49% of people feel ready for retirement from a mindset perspective, 44% feel socially ready, and just 30% feel financially ready.
Seeing retirement through this broader lens doesn’t make the financial side any less important. It helps put it in context. Money may not determine what a fulfilling retirement looks like, but it can shape the choices available to us when we get there.
Thinking about retirement readiness in this way gives us a different place to start, one that puts more of the future in our own hands. Rather than trying to imagine a completely different life, we can start with the one we’re living today. What do you value now that you’d like to carry with you? What would you like more time for? What can you not wait to be done with? Is there something new you could start building into your life right now in preparation?
These aren’t questions that have to wait until you reach retirement. Thinking about them earlier can help you begin shaping part of your second life long before work ends. And that can give your financial plan a clearer purpose too. Understanding what you have in place and what your pension could provide isn’t about fixing one version of the future. It’s about creating the financial room to support the things that matter to you, and the flexibility to change course when life does.
One of the things we’ve learned through the research is that it’s not always easy to identify how ready you are. That’s why we’ve created a simple readiness discovery journey online. It will guide you through the financial, social and mindset aspects of retirement, helping you reflect on where you are today and what you might want to focus on next.
That might mean focusing on your finances, the people in your life, how you spend your time, or the things you can begin shaping now rather than waiting until your second life arrives. None of us can know exactly who we’ll be in 10, 20 or 30 years’ time but we don't have to wait until we get there to start thinking about the life we’d like to live.
You might not know exactly what your second life will look like. But you can start exploring what matters most to you, and how ready you feel to make it happen. Explore your own retirement readiness at standardlife.ie.
