Chart of the Week: Forever Young

A client recently mentioned that the world's oldest man passed away in November at the extraordinary age of 112.

John Alfred Tinniswood, who lived in a care home in Southport, was born in August 1912 and became the world’s oldest living man in April this year. The interesting bit is that John retired in 1972 at the age of 60. That means he was retired for 52years!

This got me thinking about the time we are likely to spend in retirement. Retirement ages will vary, of course, but since John retired at 60, let’s use that as our benchmark.

As the chart below shows, on average, a man aged 60 today in England and Wales can expect to live for 24 years, while for a woman it’s 26 years, according to the Office for National Statistics.

Around one in three people aged 60 today will live into their 90s, and around one in seven people will reach 100.

As stewards of capital, it is our purpose to help people meet their financial goals, and one of the most common goals is to have enough money in retirement.

The stark reality is that we are all living longer, and that has important implications for how much we need to save.

Implications for retirement savings

• Pension contributions: a longer retirement means the need for larger pension contributions during working years to ensure sufficient income.

• Withdrawal strategies: longevity necessitates careful planning around withdrawal rates to avoid depleting funds.

• Inflation-proofing: longer retirements increase exposure to inflation risks, making growth-oriented investments more important.

There was nothing extraordinary about John, which means any one of us could find ourselves living far longer than we might anticipate. Therefore, I believe it’s vital to see investing as a lifelong journey. While retirement day might be a key milestone along the way, it’s by no means the end of our investment journey.

Given longevity, financial planning is more important today than ever and having the right investment partner is also crucial. We are privately owned and take a long-term view, which makes us an ideal long-term investment partner. Working together, we can ensure your clients have the necessary peace of mind for their retirement.

Key takeaway:  What's my retirement plan? It’s still a long way off, but I plan to regularly save as much as possible into a diversified multi-asset portfolio.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.

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