Did you know that if a man is aged 65 and his wife 60, then the law of averages says at least one of them can expect to live to nearly 90?

Unlike our grandparents' generation, who often lived for just a few years after finishing work, many of us can expect to enjoy a longer retirement. It's great news, but it also highlights the importance of being financially prepared for our post-career years.

A recent survey revealed that financial security is one of the most common concerns for the over 50s.1

'I wish I'd taken finance and money management more seriously.' Klaus

'What most affects our lives and careers in the second half of life? I reckon it's security for a rainy day.' David

Hey big spenders!
It's a fact that income drops with age. Inevitably, income falls when householders finish full-time, paid employment, and it shrinks still further in later years. In 2003-4, the median net weekly household income for 50-59s was £353, compared to £232 for the over 80s. However, today's 'third age' population is generally wealthier than ever before and the over 50s are no longer content with just the basics of life. Our spending patterns show that we're high-spending consumers, splashing out more than ever before on luxuries such as wine, holidays and hairdressing.

So what's the secret? How do our lower incomes and higher aspirations stack up together? Does it mean we'll need to work all our lives in order to afford the comfortable lifestyle we really want?

In fact, that lifestyle may not be as hard to achieve as it seems. It's all about being prepared - mentally and financially.

Know what you really want
Whatever your ideas for paid or unpaid work during retirement, it's likely that you'll have less income than you were used to in your full-time career. So it's essential to work out what's important to you and what that means for your life ahead.

Avoid assumptions about what constitutes 'quality of life' for you by questioning what really makes you happy and fulfilled. In an increasingly 'must have' world, it's easy to fall into a lifestyle trap in which many things seem essential. We then pursue goals which may be at odds with our deepest values and fail to make us happy. Is it truly important that you change your car every two years? Do you do it because you always have - or because that's what your neighbours do? Use our simple life values tool to help identify your own values and you'll be able to make a realistic plan for a fulfilling future.

What's yours?
So maybe it's time to re-evaluate the skills you thought you had. Alongside all the job-specific skills you've acquired, you've probably amassed an even larger pile of transferable skills that see you through the ordinary - and extraordinary - challenges in your life. Good at gardening? Just consider all the transferable skills involved in producing great, fresh vegetables or a manicured garden display. Maybe you handle the household accounts? That demands a host of skills you may never really have considered were your strengths.

Know what income you need
Now for the tricky bit… how will you fund the lifestyle you hope for?

It'll help if you have at least a basic understanding of how pensions work, so it's worth finding out what you can. But perhaps the most important piece of advice is to find a financial adviser who specialises in retirement planning. Avoid the small ads (or even the big ones) and choose a professional recommended by a trusted friend or colleague. Or visit www.unbiased.co.uk to find a Financial Services Authority (FSA) accredited independent financial adviser (IFA) in your area. Sooner rather than later, and even if you've already retired and are facing difficulties, an expert will be able to offer you good advice, often for free.

Another good move is to try our financial health check tool to help you get to grips with your household cashflow. Getting a clearer picture will help you to spot those areas of spending that simply don't add to your quality of life. It will help you to cut down on unnecessary expense and reduce your outgoings to free up money to spend on the things that mean more to you.

All in all, we're quite right to be concerned about a longer retirement with less money to play with, but there's lots you can do to ensure the retirement lifestyle you'd like. With some careful thought and planning, less really could be more.

Have you got a story to tell? Or any comments or questions about this article? If so, contact us today!

1 learndirect website survey, September 2007

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