Inflation and retirement goals

When is the Right Time to Retire?



Posted on: 25th April 2023

In today’s working world, there is no easy way to answer that question and put a definitive stamp on the age to transition into comfortable living.

Now more than ever, it relies on your circumstances and how things perform. Some considerations may help to determine if it is your time to start winding things up. One is examining your current financial situation and if you have enough saved to support yourself throughout retirement. If the answer is no, you may need to continue working to ensure that comfort.

Your health is another high factor because if your health is good – you can enjoy a longer retirement. If you have health problems, you may look to retire sooner to be able to enjoy it with as much health as possible. The same can be said about your personal preferences in enjoying your job or wanting to get out sooner.

Does Inflation Affect Your Retirement Plan?

Inflation is one of the most important factors to consider during retirement. If prices are rising faster than your investment returns, you will end up struggling to make ends meet when you retire.

If you have a fixed income in retirement, those rising prices are going to quickly eat into your savings more and more. That is due to your income not keeping pace with inflation, giving you less purchasing power over time. It also means that your living expenses will rise, reducing your standard of living.

Too high inflation makes it harder to save for retirement due to the need to invest more money to keep neck and neck with the rising prices whilst impacting your future retirement lifestyle.

Retirement Cash Flow Modelling

You will no doubt be pondering if you have enough money to last through your retirement years. The best way to find out is by creating a cash flow model.

A retirement cash flow model indicates how much income various sources will provide you – such as state benefits, pensions and investments. It also accounts for your estimated expenses like healthcare and housing costs. Creating this cash flow model helps you to understand the extent of your current retirement savings meeting your expected needs.

That also helps you understand how much you need to invest to achieve your ideal lifestyle in retirement planning Cheshire.

Inflation and your retirement goals are currently one of the main areas that independent financial advisers Manchester are helping clients around. Contact the team at Haven IFA today to get personalised advice around your circumstances to help you get the best for later life.