How financial wellbeing gives you stability in retirement… with room for fun too

Reports suggest that achieving “financial stability” is the main aim for a vast majority of UK retirees.

That means more than having sufficient money to pay the bills each month.

Stability is about living the desired lifestyle you choose while having enough disposable cash to do the things that mean the most to you. That might be spending time with family or jetting off around the world.

A robust retirement plan aligned to your goals will allow you to do both, looking after your finances and your wellbeing throughout retirement.

Keep reading to find out how.

Your financial wellbeing means thinking not only about your money but about your physical and mental health too

A recent survey from Legal and General (L&G) has looked at Brits’ ultimate retirement dreams. It found that 94% of UK savers see lifelong financial security as their most important concern.

According to the report, your retirement plans also need to factor in:

• Quality time spent with family (90%)
• The possible need for later-life care (81%)

• Covering major family events, like weddings (73%).

These key requirements are all attainable with good preparation and a focus on your goals.

Knowing that you can comfortably live the retirement lifestyle you choose, safe in the knowledge that you can withstand a financial shock and that your family are looked after, gives you peace of mind and a sense of control over your future.

It might also allow you the freedom to let your hair down. It’s important to remember that “fun” can also be an integral part of your plans.

As well as fuelling your financial health, a robust long-term plan should aim to look after your physical and mental health too. Combined, we think of this as your “financial wellbeing”.

Retirement means having more time on your hands and greater opportunities to do the things you love. These might include:

• Travelling and going on holiday (52%)
• Enjoying your favourite hobbies (38%)

• Completing house renovations (28%).

A good plan will allow you to do these things, looking after your wellbeing while you remain confident that you’re financially secure.

5 important steps to achieving financial wellbeing

1. Regular income

Whether in the accumulation phase, during your career, or once you’re retired, a regular income is key to financial wellbeing.

A guaranteed and stable income allows you to budget for yourself and your family, now and in the future. It also gives you peace of mind and a sense of control.

Adding irregular income options in retirement, whether from a side hustle during your working life or via Pension Freedoms, can improve flexibility but you’ll likely find that a solid foundation is key.

2. Long-term savings and investments

The financial security that 94% of UK savers are looking for in retirement begins with a solid long-term plan.

Balancing savings and investments, and risk and reward, should help you to build a plan for your future dream lifestyle, while still living the life you want now.

This requires careful budgeting, but paying your future self is key. Prioritise “future you” by contributing to your pension or protection products, and maintaining an emergency savings fund as soon as you get paid each month. Then, budget with what remains, ensuring you can still meet fixed financial obligations like a mortgage and household bills.

3. Financial resilience to withstand financial shocks

The simplest way to build your financial resilience is to make sure you have an emergency fund in place. Between three and six months household expenditure, put aside, and kept in an easy access account could make all the difference if the unexpected strikes.

Keep track of it, especially in a high-inflation climate when cash savings are effectively losing value in real terms. This should help you to hold just the right amount but not too much.

Also be sure you have sufficient protection in place, such as to protect you against a sudden job loss or a potential break in income following an accident.

Knowing that your family will be looked after should the worst happen to you is key to feeling a sense of control over the uncontrollable.

4. Favour experiences over possessions

Back in November 2022, a Royal London report found that 72% of those approaching or in retirement would rather spend their money on experiences than possessions.

The over-55s would rather go on holiday, enjoy days out, or indulge their hobbies rather than buy property, cars, and works of art.

Creating memories and experiencing new things could provide a huge boost to your mental wellbeing.

When you sit down to think about your long-term plan, consider what makes you happy now and what is likely to make you happy in the future.

5. Ignore the noise and focus on your long-term plans

With global news stories available straight to our devices 24 hours a day, it can be all too easy to doom scroll through bad news, concentrating only on the negatives.

In terms of your long-term financial plans, these short-term hits of headline-grabbing gloom can lead to emotional and knee-jerk reactions.

These are bad news for your long-term plans.

Stay focused on your ultimate goals and remember that if your dream retirement hasn’t changed, the plan to get you there doesn’t need to either.

Get in touch

If you find yourself worrying about the economic climate or any part of your long-term retirement plans or financial wellbeing, get in touch.

We are here to provide reassurance and ensure you stay on track. To learn more about how our financial planners can help, email us at advise-me@fosterdenovo.com or call us on 0330 332 7866.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.