What is the ultimate financial goal in retirement?
For many, the sign of success once they finish working is running out of life before running out of money.
Financial planning as it relates to retirement has a significant focus on cash flow forecasting to ensure that income and assets do not run out during an anticipated lifetime.
New research from insurer Canada Life has found that 17% of UK adults who have taken financial advice prioritise making sure they can spend every penny of their money in retirement without the fear of it running out.
According to the research, 13% of respondents said they would also consider how much of their children’s inheritance they can spend in retirement.
However, 23% said they are prioritising building their savings in retirement, indicating that many are worried about the current stability of their retirement income.
The research found that the most common priority for more than half of those who had received financial advice was making sure their money lasts throughout their retirement.
In second place, 51% of respondents wanted to ensure they had a sustainable retirement income, and then 26% were concerned with managing the amount of risk they take with their income.
Sean Christian, MD and Executive Director, Wealth Management Division at Canada Life, said:
“This research shows we as consumers have multiple priorities for our retirement funds and one size clearly doesn’t suit all. The desire to ensure our savings last as long as we do naturally becomes important. But planning your finances and balancing the need to enjoy what you have without fear of running out of retirement funds is always going to be a tricky balancing act.
“Establishing a close relationship with a financial adviser will help those approaching and in retirement to feel confident about how their income will last. This certainty, combined with the flexibility to adapt your plans in confidence as life and financial needs change during your retirement journey is crucial. Having the right product solutions available which are flexible enough to adapt to any change in circumstances, is also key. Blended pension products that combine guaranteed annuity income with the ability to draw down are great solutions in achieving this level of flexibility.”