Key Trends That Will Shape Your Retirement
As you plan for life after work, it helps to understand the major shifts that could affect how you live, work, and manage your money. From technology to investment strategies, here are five trends that may define your retirement in the coming decades.
- Technology Enabled Interactions : A lot of our interactions are likely to be online, for example, consultation with a physician, financial planner or advisor, even with family members and relatives. What does this mean, for future retirees?
This means a lot of travel needs would be purely for leisure. Even your investments, financial management, withdrawals and pension management are expected to be handled online.
Even now, you can use online pension calculators to estimate your pension needs and select investment plans. These retirement calculators also show you how much to invest and for how many years.
- Working Even after Retirement : A recent survey of young professionals and retirees indicated an average expectation of having to keep working even after retirement. More than half of those surveyed expected to continue working.
This could be true for more people now than ever before, given inflation and the uncertainty of investment returns. However, it may not always be out of necessity but also because of the ease of working from home using mobile devices.
For a majority of retirees, however, it may be necessary to keep earning for as long as possible to mitigate the risk of outliving their savings.
- Moving to a Smaller City : Managing your expenses post-retirement is an important and big challenge. Moving away from major cities could help keep your regular expenses low. Also, if you own a property in metro cities by the time you retire, it may come in handy for generating better rental income.
Smaller cities would mean slower life, fewer facilities, and lower costs. Provided that 30 years later, much of this would be better than today, the benefits may still last.
- High-Risk Investment for Better Retirement Security : If you have been thinking of investing heavily in stocks while you still have time, you are not alone. The majority of Generation Y is ready to invest in high-risk instruments to improve their ROI on retirement savings.
Fortunately, the providers of pension plans and retirement saving solutions are capitalising on the need. Modern pension plans not only offer equity allocation but also provide the option to automatically rebalance the asset allocation.
By balancing higher-risk equity investments with safer debt options or guaranteed income plans, you can build a portfolio that grows your wealth while managing market ups and downs. This approach can help you make the most of your working years, so you retire with greater financial confidence and flexibility.
- Dependency on Govt. Schemes for Healthcare : Like many other necessities of life, healthcare will continue to become more expensive. That simply means you may need greater social support for healthcare, especially in your later years.
You can still use senior citizen health insurance plans until the age of 85 (this age limit may vary between insurers). However, premiums may become prohibitively high at an advanced age. Thus, for regular healthcare expenses not covered by the insurance, you will need additional support from government schemes.
