These days people are living longer which in turn is increasing the timespan of their post-retirement life.
While the fact that average life expectancy has gone up is a good thing, one major concern that arises due to this is that people tend to run out of funds during their retirement phase. One of the prime causes of this is that many people tend to start saving for their retirement very late.
It is therefore important to have enough secure income or a source of income, post retirement, so you do not have to worry about how to pay your bills.
It is difficult to estimate how long one can benefit from their retirement savings as nobody knows how long they are going to live. Thus, your retirement savings are supposed to last longer than you think.
You must also make some provisions for any family members or other dependents that you would want to care of so that they can receive or inherit the unused income from your retirement savings once you pass away.
If you wish to continue living a certain kind of lifestyle after your retirement, it is important to make sure that you have enough stashed away to do so.
A lot of people have more than one source of income post retirement. These include:
Income that is regular and is guaranteed for the rest of your life like:
– Your state pension
– Pensions from a defined benefit scheme
– From your lifetime annuity
This source of income is something that you ought to get but the amount may vary. It is not even guaranteed to last for the whole of your retirement time span and includes:
– Paid work
– When you invest your retirement savings, but you can still opt to draw an income from it. This is called as a drawdown scheme
– Savings and investments
– Renting out a room in your house
– Rental properties you own