RETIREMENT AND HER MAJESTY THE QUEEN – WHAT WE CAN LEARN FROM IT

The ascension to the throne for King Charles III was a long time coming Whilst he will no doubt create positive impact as the new king, we must not forget the longstanding success of Queen Elizabeth II and her working life, even past her retirement age.

Queen Elizabeth II is Britain’s longest-reigning monarch, who served her nation for over 30 years and sat on the throne for 70 years Despite making plenty of public appearances throughout her reign, although less and less as she became older, she ultimately worked until her death at the age of 96.

This scale back of engagements, yet working beyond the age of 60, mirrors a pattern we are seeing in the aging population – retirement is no longer a hard stop event that happens when people reach the official retirement age.

Is the definition of retirement changing?

Even when Queen Elizabeth II turned 60 in 1986, there was no withdrawal from public life; State Visits continued right up until the COVID-19 pandemic

Like the Queen, it’s becoming increasingly likely that those reaching pension age will continue working or take on their own engagements for years or even decades to come

People are now seeing retirement in a different light –just because you hit the golden age of 60, does not mean that you must stop everything that you’re doing. People now realise that they can continue to be engaged and proactive, giving back to the community as best as they can.

We see several examples of this within our own client base who have retired but are currently working within charities, taking up non-executive roles or acting as consultants. In fact, many of them are busier than before they retired!

What used to be a very structured framework for retirement now has a great deal of uncertainty, and there are more decisions to be made for individuals hitting the retirement age; the boundary between work and retirement is becoming blurrier, and there are more options and activities retirees can consider now more than ever before.

Is retirement planning still important?

Living for a decade or longer in retirement was the exception rather than the norm. Today, it’s not unusual to live two or even three decades past traditional retirement age. This now makes retirement planning vitally important in order for you to have adequate financing for your retirement and beyond

However, through the annual St James’s Place research report, the Money Relationship Monitor (November 2022), only 49% of Hong Kongers feel that they are on track to have enough money saved for the lifestyle they want to live in their retirement. Of those that are on track with their finances, 30% of them have the ability to retire early, but intend to continue working.

This indicates to us that there is a desire to continue working at varying degrees after retirement but unfortunately, having the finance to back their lifestyle after retirement can be a struggle

You must also take into account your emotional wellbeing as you age. The Queen’s unfortunate loss of Prince Philip emphasised that there will come a time when bereavement can be a prominent feature. While you can never really prepare for such emotional impact, at least being able to prepare for the financial aspect of it can provide you with a peace of mind, and give you the necessary space to grieve

Retirement for many can be seen as not a chance to stop, but a chance to try something new in your next phase of life. This includes thinking about where you want to go and how to get there. You might dream of starting a new business in later life, swapping employment for rewarding unpaid work or embarking on some travels But in order for this to happen, having an adequate retirement plan in place is necessary so that you can live the retirement life that you want.

Create your own sense of direction for retirement

As responsibility shifts increasingly to individuals, there are more decisions to make along the way, such as the best mix of assets and products to invest in Pensions will remain vital, not least due to their tax efficiency and the extra contributions that employers offer.

However, assets such as investments and property also have a big role to play in any diversified portfolio The benefit of having a range of assets is that it provides future flexibility as they can be earmarked for different purposes and drawn upon at different times, to provide future lump sums of money or an income.

There are several steps you can take to plan ahead and make retirement what you want it to be:

1. Understand what you want

Whether or not you give up work entirely in retirement, you may wish to review how you spend your time and what you want from life.

Focus on things that you may have wanted to do early on in your life which you may have more time to focus on down the line Think about your passions and hobbies that you have previously engaged in, that you want to take the time to explore

Volunteer work or consulting gigs can also be factored in. Think about what is important for you and include that into your retirement plans.

2. Don't underestimate your potential life span

Research in 2018 by the Institute for Fiscal Studies (April 2018) found that, on average, people in their 50s and 60s underestimated their chances of survival to age 75 by about 20 percentage points and to 85 by around five to ten percentage points This increases the risk of running out of money if you live longer than expected

Plan for longer than you expect to live, so that you ensure you have enough money even past retirement – there’s absolutely no harm having more savings in your pot after retiring!

3. Speak to someone about it

As you enter your later years, you might be thinking about setting up a power of attorney, so that if you do lose capacity, support will be there That invariably means having potentially difficult conversations with family members

4. Build your team of trusted individuals

The Queen isn’t alone in being able to turn to specialist advisers for financial, legal and other matters Ask the experts.

A financial adviser, for example, can help you plan for your retirement, and ensure that you don’t run out of money later in life when taking longevity into account They can help map out your plans, review them as the years pass, make changes when necessary, and help navigate the difficult conversations you will have down the line.

Previously, retirement was seen as one of the last few chapters in your life, where you could enjoy the remainder of your time resting and relaxing. Nowadays, it can be considered as the start of a new book in your life – it’s an opportunity for you to work on a passion project that you couldn’t get around to during your working life It’s an opportunity for you to use your previous work experience to help consult existing companies on their next corporate strategy. It’s an opportunity for you to open your eyes and see the world by traveling non-stop – the opportunities are endless after retirement, and it is imperative that you have the finance in place so that you can enjoy the next stage in your life

St. James’s Place guarantees the suitability of the advice given by members of the St. James’s Place Partnership when recommending any of the wealth management products and services available from companies in the group

The value of an investment with St James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances

About St. James’s Place

St James’s Place is one of the largest wealth management companies serving the expatriate community living and working in Asia We have many years of experience in Asia and have offices in Hong Kong, Mainland China and Singapore

We are personally committed to providing quality face-toface advice and the very best client service

Claire Robinson Partner, St. James’s Place

Claire.Robinson@sjpp.asia https://www.sjpasiainfo.com/cr-uk-pensions