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Why cruise holidays are booming for retirees

The cruise market offering has changed enormously in recent years, where once it was purely the domain of cabaret cheese and bad karaoke, now there’s something on offer for everyone (don’t worry, though, if you love cabaret and karaoke, that’s still an option). Whatever your tastes and priorities, you won’t be hard pressed to find a cruise to suit your needs.

Cruises have always been a popular choice for retirees but with the new potential for personalisation, they’re more popular than ever, with over 26 million passengers carried worldwide in 2018 alone. So what is it that makes taking to the seas such an attractive prospect?

1) Flexibility

Cruises have the potential to be a catch-all for whatever kind of holiday you’re looking for. Whether you’re after a romantic getaway, a family break over the school holidays, or a round-the-world trip that ticks off everything that’s left on your bucket list; it’s all possible when you’re on a cruise liner.

2) Activities

There really is a cruise out there for everyone. Some people want to lay on the deck and bathe in the sun, some people want to hone their rock-climbing skills, while others want to kayak alongside breaching whales. The possibilities are endless: if your priority is trying the food of critically acclaimed chefs, or even having a go at cooking the dishes yourself, fine dining can now be found onboard in some of the most remote corners of the world’s oceans.

3) Modern life can be stressful

Taking a cruise is not just about the food and entertainment available on board and the chance to see some fantastic locations. It’s also about taking the hassle of too much planning away from the holiday goer. Being able to relax and take a breather while you’re travelling the world is becoming a bigger priority for people and this has been reflected in the incredible attention and investment given to spa and wellness facilities on cruise ships. Plus it’s a great chance to unplug and really experience the world around you.

4) Value

Despite historically being a pursuit of the highest luxury with the pricetag to match, there are plenty of choices available for more budget conscious passengers. All-inclusive cruise holidays are a smart way to enjoy all the bells and whistles whilst remaining price savvy. Pick the right vessel and you can experience entertainment of broadway quality included in your price.

If you want to enjoy your retirement to its fullest but can’t decide on the best way to do that, considering a cruise trip is a great place to start.

Sources
https://www.lonelyplanet.com/amp/travel-tips-and-articles/getting-on-board-10-reasons-to-consider-a-cruise-trip/40625c8c-8a11-5710-a052-1479d27561cd?_t_witter_impression=true
https://cruisemarketwatch.com/growth/

4 ways to live a happy retirement



Retirement should be the time of your life. No more early alarm calls, no more commuting and no more carefully counting your holiday allocation. Instead, you have the freedom to do exactly as you please. Yet retirement might not always work out as the idyllic move to a cottage by the sea it’s billed to be. Some people, in fact, dread retirement and feel they’re being put out to grass. They fear they’ll miss the structure and companionship that work gives. Think of it more as ‘change’ not ‘old age’

Think of it more as ‘change’ not ‘old age’

Retirement is automatically associated with old age in people’s minds. The very word conjures up images of people sitting around in retirement homes in their slippers, watching daytime T.V. But this is far from the truth. Old age, today, encompasses a vast span of years, from 65 to 100. There are many active retirees living life to the full. And if you think how much the average person’s life changes between 25 and 60, just think how many possibilities could lie ahead in the same timeframe. Going from work to retirement is a huge transition – yet people cope with many other major transitions during the course of their lives; having a baby, changing jobs, going through a divorce, moving house. The key is to use your resilience and strength from previous times of change to help as you move into retirement. Don’t see it as entering old age, see it more as a time of embracing life’s opportunities.

Don’t just be concerned about the money side of things

That may sound a curious thing to read in a financial newsletter. And pensions will form a key part of any more retirement planning. There’s also no denying that pensions can be complex so it’s important to find the right solution for your situation whether it’s taking an income or accessing a lump sum. But the financial side of things is much wider than just your pension. So take time to think about what your ideal lifestyle would look like. Think about some proper financial planning. What are your goals and ambitions for retirement? Are your current finances on track to help you reach them? The money is just an ends to enable you to live a happy retirement and find a new purpose.

Be clear in your mind what you really want to do

In today’s world, where such value is placed on career status, retirement can be seen as an end rather than a new beginning. But you don’t have to be in paid employment to be happy and fulfilled. You may, in fact, find you achieve far more satisfaction in life after work. Why not do something you’ve always wanted to but never had time to? Learn to play a musical instrument, take up a sport, sign up for some volunteering, enrol on a course, get involved in a conservation project, travel the world… This is your time to do as you please. Remember, you don’t have to be constantly busy – sit back and reflect on your true values.

Adopt a proactive mindset

You often hear stories of people becoming ill, or even dying, within months of stopping work – a cruel twist of fate after they’ve laboured hard for years, looking forward to their retirement. According to the Office for National Statistics, though, health and wellbeing do actually increase in retirement while depression and anxiety often fall. This is as people have more time to adopt a healthy lifestyle and find new sources of fulfilment and exercise. The key seems to be to make a determined effort to stay sharp, be proactive and keep stretching your boundaries. It may sound surprising but workaholics often love retirement as much as they loved their careers.

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Sources

Sources
https://www.theguardian.com/lifeandstyle/2018/oct/06/life-keeps-evolving-six-ways-to-have-a-happy-retirement

3 pension changes you may have missed in the Budget

There was scarcely a mention of the ‘P’ word in October’s Budget speech (believe us, we were listening closely for it!). Instead, Hammond used the Budget speech as an opportunity to unveil his ‘rabbit in the hat’ changes to income tax thresholds, an increase in NHS mental health funding and a ban on future PFI contracts.

However, we had a good read of the accompanying ‘Red Book’ for any mention of pensions. At 106 pages, this was no mean feat. Fortunately, though, it was time well spent as we found some changes to pensions you may otherwise have missed:

The pension dashboard

HM Treasury confirmed that the Department for Work and Pensions (DWP) would look at designing a pension dashboard which would include your state pension. The pensions dashboard will be an online platform that will let you see all of your pension schemes in a single view. The average worker is nowadays expected to work eleven jobs during their career and keeping track of so many pension pots could prove confusing to say the least.

There was an extra £5 million of funding for the DWP to help make the pension dashboard a reality. Commentators see the dashboard as a welcome sign that the government is committed to helping savers keep track of their funds.

Patient capital funding

The government announced a pensions investment package which should make it easier for direct contribution pension schemes to invest in patient capital. Patient capital refers to investments that forgo immediate returns in anticipation of more substantial returns further down the line.

The government may review the 0.75% charge cap and there is widespread speculation that it will be increased to allow more investment in high growth companies.

Cold calling ban

The government has promised to ban pensions cold calling as part of a drive against pension scammers. Almost two years since the government’s initial proposals to combat pension scams were announced, pensions cold calling will finally be made illegal.

Research by Prudential indicates that one in 10 over 55s fear they have been targetted by pensions scammers since the introduction of pension freedoms in 2015. Cold calls, with offers to unlock or transfer funds, are a frequently used tactic to defraud people of their retirement savings.

As much as these measures go a long way to making people’s pensions more secure, the government will be powerless to enforce cold calls made from abroad and not on behalf of a UK company. It is unclear how and if the government will work with international regulators to mitigate the dangers of such calls.

Sources
https://www.moneyobserver.com/news/budget-2018-three-pensions-changes-you-may-have-missed

over 60s are jumping off the property ladder. Here’s why….

In 2007, there were 254,000 older people living in private rented accomodation. According to research by the Centre for Ageing Better, over the last decade that figure has skyrocketed to 414,000. If things continue the way they’re going, they estimate that over a third of those over 60 will be privately renting by 2040.

So why the shift? Renting comes with some clear benefits. Having to pay stamp duty becomes a thing of the past, as does worrying about managing property maintenance. A certain sense of freedom comes with renting too, particularly in terms of location. It’s a great opportunity to finally live on the coastline or in the city centre that you’ve always wanted to, but have not been able to afford to.

For example, one couple had previously owned a retirement flat in Torquay which they subsequently sold for £55,000. They dreamed of moving to Bournemouth, where a modest one bed apartment would have set them back closer to £150,000 and so was out of their reach. They found a home to let on an assured tenancy, allowing them to remain in the property for life for a fee of £775 a month including service charges. Selling to rent has allowed them to liquidate their biggest asset, and free up their capital to spend on travel.

Renting needn’t be forever, and for some people it’s a great opportunity to stop and think about your next move. It can give you time to really look at the options out there if you intend to get back on the housing ladder. Your requirements will change as you grow older and downsizing can be a great idea for some. Before you find the perfect property which will suit your needs going forward, renting gives you the chance to release some capital and decide what to do with it.

It’s worth bearing in mind, though, that by selling up and moving into private rented accommodation, your estate could receive a higher IHT bill. The inheritance tax exemption introduced in 2017 allows parents and grandparents an additional IHT allowance when their children or grandchildren inherit their main home, and so selling your home could remove your eligibility for the exemption.https://www.telegraph.co.uk/property/retirement/renting-retirement-over-60s-jumping-property-ladder/
https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/should-you-sell-up-and-rent-in-retirement/

4 savings habits of millionaires

There are no shortcuts or guarantees when it comes to achieving self-made millionaire status. That said, it can’t hurt to look at the financial habits of those who have managed to do just that to try and boost your own coffers. Here are our top tips from looking at those who’ve become millionaires by age 30. Who knows, they might just lead to you being worth seven figures in the future.

  1. Don’t rely on your savings – The current economic environment makes it very difficult to become wealthy through saving, so increasing your income is an obvious but good way to boost your bank balance. Whilst increasing your main salary can also be a challenge, you might think about other ways to achieve this such as earning passive income through property rental, or taking on freelance or consultancy work on the side (just keep an eye on any tax repercussions).
  2. Invest, invest, invest – Instead of saving for a rainy day, put your savings into investments. If you choose investments and accounts with restricted access to your funds, not only will this ensure your investments pay off, but it will also help you to focus on increasing your income rather than relying on money you’ve put away.
  3. Change your mindset – Nobody has ever become a millionaire without believing that it’s something they themselves can both achieve and control. The best way to do this is to invest in yourself. Spending time educating yourself about both your business area and the financial world in general will help you to understand how to capitalise on opportunities and genuinely believe you can increase your net worth.
  4. Make plans and set goals – You’ll only boost your wealth if you actually plan out how you’re going to do it. Before you can make a plan, however, you need to decide what you’re aiming for. If you really do want to become a millionaire, then think big: if you have a certain figure you want to achieve, aiming higher will help ensure you reach it or even surpass it.
    Sources
    http://www.independent.co.uk/life-style/9-things-to-do-in-your-20s-to-become-a-millionaire-by-30-a7377801.html

millennials on target to enjoy inheritance boom but not until they’re 61

A recent report has revealed that millennials are set to benefit from an ‘inheritance boom’ bigger than that experienced by any other generation in the post-war period. The Resolution Foundation, the think-tank which carried out the research, defined millennials as people currently aged between 17 and 35, and found that those within this age bracket will be left record amounts of wealth by their ‘baby boomer’ parents and grandparents.

The report found that inheritances will double in size over the next twenty years, peaking in 2035, as baby boomers who generally have high levels of wealth move through old age. Additionally, nearly two thirds of millennials have parents who are property owners, of which they may receive a share in the future. This is a stark difference to adults born in the 1930s, of whom only 38% received an inheritance.

However, the Resolution Foundation also stressed that the inheritance boom will not be a ‘silver bullet’ which allows millennials to get on the property ladder or address the wealth gaps which are currently growing in society, as most will only benefit from their inheritance when they themselves are nearing pension age. The average age at which people lose both parents is getting later; people who are currently between 25 and 35 are expected to be 61 years old when this happens.

Another key finding of the report was the strong correlation between the property wealth of millennials and the amount they are set to inherit from their parents, with those who were able to get on the property ladder during their early 20s, destined to benefit the most from the inheritance boom. The new inheritance tax housing allowance will also be fully implemented in 2020, meaning that as much as £500,000 per person will be able to be passed on without incurring tax, allowing millennials whose parents own valuable homes to cut their average tax burden in half.

In comparison, those millennials who do not own their own home by their mid thirties are much less likely to receive a large inheritance from their parents. Additionally, if they inherit this when in their 60s, they’ll then be much less likely to be able to secure a mortgage, meaning that some may struggle to climb onto the property ladder throughout both their working and retired lives.

Sources
http://www.telegraph.co.uk/news/2017/12/30/millennials-will-pensioners-receiving-inheritance/
http://www.bbc.co.uk/news/uk-42519073

three lessons about retirement from those who have already retired

Retirement is undoubtedly the section of your life which receives the largest amount of planning for most people, with much of your working life spent ensuring you can live where and how you want once you’ve retired. However, as with all plans, there are always going to be aspects of your retirement which don’t end up quite how you’d expected, and a few you might not have even considered until you’ve actually given up work. Here are a few key lessons learned by those enjoying retirement already:

  1. Part-time work might not be for you – More and more people are including a part-time job into their plans for when they retire, sometimes for financial reasons but also to remain social and active. In theory it’s a great idea, and whilst it works well for some, finding something that meets all of your needs can be more difficult than you might expect. If you do want to continue working part-time, try to have something lined up before you actually retire. It’s also a good idea to plan for your part-time earnings to be extra money rather than a requirement for your monthly expenses.
  2. Think carefully before moving home – It’s natural that you’ll want to spend more time with family once you’ve finished working. But be realistic when making plans regarding your home. Keeping hold of a larger property might seem like a good idea to host family events, but if the space is rarely used then downsizing is often a far better option that makes both maintenance and utility costs more manageable. Don’t rush to move closer to family either. If your children are now young professionals it’s likely that they’ll need to move from one area to another for their career, which could potentially leave you living in an unfamiliar area and no closer to your loved ones.
  3. Maintain a realistic outlook – It may sound obvious, but retirement doesn’t automatically guarantee a stress-free life. It’s therefore important to make plans and keep a balanced mind to help you deal with any issues that either arise or continue once you’ve finished work. In fact, no longer having a career to focus on can make other aspects of your life to do with family or health feel overwhelming if you don’t prepare yourself emotionally. Taking up new interests and hobbies may seem like a cliché, but they’re a great way of ensuring you can keep perspective and make plans for the days and weeks ahead.

Sources
http://www.bankrate.com/finance/retirement/lessons-new-retirees-learn-hard-way-6.aspx

too late to start saving?

Not beginning to save towards your retirement until you reach your fifties would not so long ago have been considered leaving matters far too late to put anything meaningful away for your life after work. Previous generations saw building a pension as something to do over an entire career, with contributions throughout your working life coupled with investment growth being the only way to ensure your retirement pot was substantial enough to provide for you throughout your retirement.

However, whilst compound interest still means that anything put away at the start of your career will see some serious growth by the time you need it much later in your life, the reality today for many young people is that they simply have very little to invest when they first begin work. Many may find that they won’t be able to begin saving seriously until they reach middle age.

The reasons for this are several. First of all, your wages are statistically likely to reach their peak for women during their forties and for men in their fifties. Secondly, as the average mortgage term is twenty-five years, most people who bought their home in their twenties are likely to have finished paying it off by the time they reach their fifties. A third key reason is the declining cost of raising children. Whilst it’s unlikely that you’ll stop giving them financial support completely, if you’ve had kids in your twenties or thirties it’s probable that the cost of providing for them will have gone down a great deal by the time you’re heading towards 50.

With considerable tax relief on both ISA investments and pensions, it’s now possible to build a healthy retirement fund even if you only start saving in your fifties. For example, someone with no existing savings, earning £70,000 annually, who started saving the maximum permitted yearly amount of £40,000 at age 50 could amass a pension pot of £985,800 by the time they turn 67, assuming a 4% annual return after charges.

£40,000 a year might sound like a huge amount to save every year, but this amount includes the generous tax relief enjoyed by pension savings. Our £70,000 earner would only need to put away £27,000 of their own money in order to reach the £40,000 contribution, whilst a basic rate taxpayer would need to contribute £32,000 to achieve the same.

So, whilst it’s sensible to begin saving as early as you can, it is possible to begin putting money away when you reach middle age and ensure you have enough to provide for yourself later in life. The last ten years of your working life can reasonably be seen as some of the most important in terms of preparing for your retirement.

Sources
http://www.telegraph.co.uk/pensions-retirement/financial-planning/start-investing-50-get-1m-pension-pot-67/

planning for the best time of your life

Whether you’re nearing the start of your retirement or you’ve still got a few years of work ahead of you, it’s likely that you’ve already started planning this next significant phase in your life. But no matter how much you read, how many numbers you crunch and how many pounds you put away, you might still find yourself constantly adopting a pessimistic view on what should be the period of your life set aside purely for you to enjoy yourself. Psychologists describe this as “awfulizing” – focusing on everything that could go wrong, to the point of forgetting about all the positives that are likely to await you.

It’s a feeling that many retirees describe having in the countdown to finishing their working life. It’s often not a rational response: even those who have saved plenty for their retirement, mapping out the likely eventualities and ensuring they have a financial safety net, can find themselves overwhelmed – panicked even – by the realisation of the huge amount of free time and opportunities which will soon become available to them. A little bit of worry about the unknown is natural, but it’s when this worry blocks your path to achieving your retirement dreams that it develops into full-on awfulizing.

So, if you feel yourself slipping into awfulizing, how can you overcome it? It’s personal to everyone, but there are two steps. The first is to take ownership of those things within your control. Sound financial planning and taking some professional advice should be at the top of this list, as without enough money to see you through your retirement, your imagined fears may well end up as a reality. Being open and honest about this with family is a good idea to ensure that your plans and commitments once you retire are known and understood by everyone who might be affected.

Having taken care of what you can control, the second step is to address those things that you can’t. Accepting that some eventualities simply can’t be planned for is essential to reduce your awfulizing tendencies, but in order to banish them completely you need to become comfortable with uncertainty. View your retirement as a story that hasn’t yet been written rather than a plan from which you can’t deviate. As long as you balance management of the elements you can control with acceptance of those you can’t, you should find yourself free from the awfulizing mindset that can threaten your enjoyment of the best time of your life.

Sources
https://www.forbes.com/sites/nextavenue/2017/06/23/how-i-stopped-awfulizing-retirement/#3da564571baf

why retirement is worrying millennials and what steps they are taking

A recent study by HSBC has revealed the main financial worries of the ‘millennial’ generation, recognised as those born between 1980 and 1997. As its title suggests, the ‘Future of Retirement’ survey focuses primarily on how millennials feel about how they are preparing for life after work, but also delves into the wider issues around money and modern life which are inherently linked to the subject.

In general, millennials see themselves as less fortunate than the generations which have come before them. Over half (52%) felt that they had seen weaker economic growth than previous generations, whilst 60% said they saw themselves as experiencing the consequences of decisions made by those older than them, including rising national debt and the global financial crisis. In relation to retirement, 65% of respondents are worried that they will run out of money when they retire, whilst 46% were concerned that employer pension schemes would collapse without any payout for their generation.

The average age that millennials begin saving for their retirement is 27, with just 13% admitting to not having begun putting money away for their pension yet. 76% said that curbing their current spending was difficult but necessary to save for later in life, whilst 68% are willing to do so. When it comes to investment, nearly half of those surveyed (48%) said they would go for a risky opportunity which had the potential for greater returns further down the line.

Expanding out to look at the concerns of all those currently working, which includes both Baby Boomers (those born between 1945 and 1965) and Generation X (born between 1966 and 1979), the survey found that only 17% were worried they wouldn’t be financially comfortable in retirement based on their current savings, with a worrying 14% admitting to having not been able to save anything. However, over half (52%) said they felt that due to the constantly changing financial climate, their current retirement plans would not be relevant.

When asked about back-up plans, around two thirds (67%) of working people said they would continue working in some way after they reached their retirement, whilst more than four fifths of people (82%) said they were intending to retire two years later than originally planned in order to give themselves greater financial stability. 41% also said they wouldn’t mind taking on a second job or working for longer to supplement their pension pot.

The key guidance from HSBC’s research is that starting to save early is the best way to ensure you have sufficient savings to support yourself after you’ve retired. Another key message is the importance of seeking advice, with many people now using technology to plan their retirement: almost half of those surveyed (49%) have used the Internet to research their options, 35% have used online retirement calculators and 27% have contacted advisers online. Online savings accounts are also popular, with 41% saying that they are using one to put money away.

Sources
http://economictimes.indiatimes.com/wealth/plan/hsbc-survey-finds-out-why-retirement-is-worrying-millennials-and-what-they-are-doing-about-it/articleshow/58869087.cms