The New Age of Retirement and How the Baby Boomers Are Changing Everything

DSC_1309-187x300dc8fcca0830ccd37de0a35018d1ae059Not content with filming a feature-length documentary about the Baby Boomer generation and their retirement, I will be collaborating with another Financial Planner to publish a book on the same subject.

Boom! – The New Age of Retirement and How the Baby Boomers Are Changing Everything is the new book I am co-writing with retirement planning expert Justin King of MFP Wealth Management in Dorset.

Our book explores the challenges raised by the four D’s of retirement; debt, divorce, disease and death – and deals with the misnomer that retirement is exclusively an economic event.

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Through in-depth research with Baby Boomers and experts in this field, the book looks at whether this generation will redefine this stage of their lives in their own terms – as they have done time and time again – or whether retirement will redefine them.

We both assert that a meaningful retirement is worth planning for, but it doesn’t happen by accident.

The book is full of practical advice guiding retirees through the minefield of planning for their retirement and coping with the unforeseen.

Collaboration between Justin and I as two Chartered Financial Planners passionate about bringing peace of mind to the retirement community continues on from the feature length documentary,’ Boom! Demographics are Destiny’, which I have written and directed, with Justin as Executive Producer for the project.

As the retirement capital of the UK where 30% of residents are retired, where better to launch the book than in Christchurch, Dorset, home to Justin’s firm of award-winning Chartered and Accredited Financial Planning Firm™, MFP Wealth Management.

The book launch will coincide with the screening of the Boom! feature length documentary at Christchurch’s Regent Centre on Friday 28th November 2014, during Financial Planning Week.

You can purchase your ticket for this screening at this impressive venue in Dorset using this link.

All attendees will receive a free signed copy of the book, which will be available to pre-order shortly.

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Live in the past to get better with money

Live in the past to get better with moneyWhat’s your approach to time?

Most life coaches will attempt to convince you of the benefits of living in the present.

From a personal finance perspective however, living in the past might be a better choice.

New research by Stanford University has found a “high degree of correlation between a person’s approach to time and their financial health.”

The researchers concluded that your approach to time has a bigger impact on your personal finances than your education or financial literacy.

People who live in the past tend to be “once bitten, twice shy” and therefore adopt a more conservative approach to their money management.

If you live in the present, as suggested by just about everyone in the ‘lifestyle optimisation industry’, your financial decisions could be more impulsive. Acting on impulse is rarely sensible when it comes to your money.

If you focus on the future, you are good at setting yourself up for success, but more likely to make poor financial decisions if you don’t have reliable information to hand.

The link discovered by the researchers between financial literacy and financial health was also quite interesting.

They discovered the two are not as closely correlated as you might assume, with those individuals who demonstrate “a high degree of financial acumen” not reliably in good financial health.

One finding with relevance to my current work on a documentary about Baby Boomers in retirement was that millennials think they’re less financially literate than Baby Boomers but are, in fact, financially healthier.

This challenges the widely held belief that boomers are generally better off financially than the subsequent generations, despite their grounded belief that they lack the experience or knowledge to make wise financial decisions.

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Is your BMW causing an unhappy retirement?

Is your BMW causing an unhappy retirement?As a BMW driver, I was slightly perturbed to read at the weekend that this particular marque is the most popular choice for unhappy retirees.

The finding was the outcome of research by a fellow Certified Financial Planner in the US, Wes Moss, who surveyed 1,300 retirees about their car ownership and happiness in retirement.

Wes found that the most common luxury car brand owned by unhappy retirees was a BMW.

He concluded that the correlation between driving a Beemer and having an unhappy retirement could be less to do with the car itself and more about the impression it leaves on others.

This is because, he suspects, BMW drivers are ‘still competing’.

According to Moss, “they buy the ‘Ultimate Driving Machine’ because they’re looking for a distraction — a high-end status symbol to make them feel better about themselves,” 

“But in purchasing a car, they have opted, either knowingly or unknowingly, to add an additional financial burden to their lives.”

The best luxury car choice for happy retirees? That would be a Lexus, according to the research.

Moss found that owning a Lexus costs 16% less than BMW ownership over a five year period, which could contribute to a happier driving experience.

Looking at non-luxury car brands, Nissan and Subaru were top choices for happy retirees, and Chrysler and Dodge for those unhappy in retirement.

Whether there is genuinely a correlation between choice of car brand and happiness in retirement or not, car choice in retirement is an important consideration.

Thinking about the total cost of ownership is important during a time in your life where you are likely to be living on a fixed income and have limited opportunities to replace spent capital.

Factor cars and the cost of ownership into your Financial Plan as you approach retirement, and improve the chances of staying happy. 

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Questions or talk – which is better?

Questions or talk - which is better?What questions do you expect some one to ask of you when you are buying something from them?

Imagine that you are buying a new car. Would you expect questions such as:

  • What kind of driving do you do? (short or long journeys);
  • Is economy important to you? (mpg):
  • You have a family, how old are the children grandchildren?;
  • Is it for business or personal use (or both)?
  • Are you buying it personally or is it a company vehicle?
  • What are you currently driving how did you decide to buy that car?
  • How long do you typically keep a car for?

I am not a car salesman but I kind of think that these types of questions take precedence over a 30 minute fact find gathering my contact details.

Yesterday Martin and me took a trip out to look at buying a new car.

What we thought might be a 30 minute exercise including a test drive turned into a two hour plus marathon.

A combination of a young and  inexperienced salesman (to be fair he was charming and tried his very best) and some technology that made what we use look “state of the art” meant we sat desk bound for most of that time.

Again to be fair we were offered tea/coffee and even some chocolate (presumably to keep our blood sugar levels up!) but really, over two hours to buy a car?!

I know that new cars are not cheap and that it is an important buying decision but the “sales process” was neither slick nor engaging.

We both felt we could record the session as continuous professional development because it made us think about our own first meetings with clients.

Whilst some of it is “tell” we concluded that asking questions should always dominate such first interactions with prospective clients.

After all it is about them, not us.

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Retirement planning? What retirement planning?

Retirement planning? What retirement planning?A study conducted by Aviva last week concluded that one in ten say they will ‘work until they drop’.

This was yet another study that found the majority of people have little or no plan as to how they will fund their retirement.

It seems there is always a reason for not saving or planning for the future, such as:

-Too young to worry about it
-Concentrating on buying a house
-Raising a family
-Too busy
-Too old to bother with it

But I for one do not want to be working until I drop!

Working out of choice and not necessity is another matter entirely but I would like to be a position to choose whether I continue to work past State pension age (which is creeping up and up).

A LifeWealth Design plan can help you put a long term financial plan in place to ensure that you can meet your goals and objectives.

It can show you the difference that cutting back on your gym membership (as you never actually go!) can make to your financial future.

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Beauty and value in the same ballpark

Beauty and value in the same ballparkBeauty, they say is in the eye of the beholder. So, it seems is value.

There has been an interesting debate taking place on the subject of value amongst members of the financial services profession.

Media and regulatory focus tends to be on price but most people understand price in isolation doesn’t mean very much.

Our view at Informed Choice is that clients need to be able to form an opinion about whether the  price for our services represents value for money, or not.

At least one commentator claims that we shouldn’t use the word “value” when we talk about what we do but instead should simply describe the “stuff that we do” and leave the consumer to make up their own minds about value.

I sort of understand what he means but our long experience of providing advice to clients surely enables us to decide if what we are doing is valuable or not?

And of course clients tell us it is so we simply reflect back what we are told.

Where we don’t think that we offer value for money we are quite prepared to say so – and often do.

A second commentator thinks that is all about the “experience.”

The client judges value for money based on the journey they go through with their adviser.

Such things I guess as responsiveness, clarity of explanation and basic things like actually doing what they say they are going to do.

But how do you know whether the experience is going to be good at the start of a client/adviser relationship? Well, you don’t of course.

So you could ask for a reference from other clients and that is not a bad thing to do at all.

The same commentator believes that value is a function of certainty of outcome.

Here I am less convinced that this is an easily measurable item.

We could be advising clients about events that are going to happen 20 years from now and thus the ability to predict an outcome is probably no more than a guess.

But a service that reviews performance to target every year along the way probably stands a better chance of hitting target. Experience might also might help to deliver confidence about outcome.

So when judging the value of what your adviser does best to base this on what they do rather than how they look.

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Special measures regime & care homes

Special measures regime & care homesIt was interesting to read this morning that the government is planning to extend the special measures regime to care homes.

This system was introduced by the Care Quality Commission (CQC) last year and applied to 11 failing hospital trusts.

From next year, a similar regime will be applied to care homes and also home care agencies.

It means that up to 25,000 service providers will be subject to the special measures regime, and could face closure if their standards are not up to scratch.

From this autumn, the CQC will introduce a ratings system which will be applied to care homes and home care agencies. The special measures regime will be based on these ratings and is expected to come into force from April 2015.

Care homes and home care services will receive a rating of outstanding, good, requires improvement or inadequate; this is similar to the OFSTED ratings applied to schools.

The new system of ratings and special measures should help give users of these care services added confidence, but there will always be unintended consequences when such systems are introduced.

Concerns have already been expressed about the financial implications for care homes placed in special measures, with some commentators expressing doubts that homes placed in special measures will be able to continue to function.

What this highlights is the importance of checking the financial strength and stability of a care home or home care service provider before choosing them.

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Albury Produce Show

Albury Produce ShowLiving and working in Cranleigh as I do, it’s difficult to express a preference for any annual show other than the Cranleigh Show.

But over the past few years we have become regular visitors to the Albury Produce Show.

2014 will be the 68th consecutive Albury Produce Show (for the show, not for me as a visitor!) but according to their records, shows took place there in the 1920′s and 1930′s.

If you’re local to Albury and haven’t visited before, I recommend it.

The show is held on Albury Cricket Ground, Albury Heath, Albury, in the beautiful Surrey Hills.

With our horse living a mile down the road in Farley Green and my girlfriend working a mile the other direction at a school in Chilworth, we are almost local to the area!

This year the show takes place on Saturday 19th July, from 2pm to 5pm. If you’re feeling energetic, there is a Barn Dance afterwards, starting at 8pm.

For the first time this year, I’ve decided to enter the show, submitting several of my photographs and aiming to accumulate enough points for a chance at winning the coveted Carolyn & Michael Woods Cup!

Here is a sneak preview of some of my entries:

Princess and her pony by Martin Bamford - Downloaded from 500px_jpgBlyth_s Hornbill by Martin Bamford - Downloaded from 500px_jpg-1Winterfold Sunset

Lancing Beach

 

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Sharp rise in inflation

Sharp rise in inflationThe latest price inflation figures from the Office for National Statistics (ONS) show a sharp rise in the year to June.

The Consumer Prices Index (CPI) measure of price inflation went up from 1.5% in May to 1.9% in June.

This measure of inflation was pushed higher by a rise in the price of women’s clothing.

It remains below the Bank of England’s 2% target for CPI inflation, where it has now been for seven consecutive months.

Price inflation as measured by the Retail Prices Index (RPI) rose to 2.6%, up from 2.4% in May.

This measure of price inflation includes housing costs and mortgage payments, which makes it a more relevant measure of price inflation for many working age people.

Food and non-alcoholic beverages rose in price, contributing to this RPI increase.

The ONS also revealed today that house price inflation was 10.5% for the year to May.

It will be interesting to see whether these latest price inflation figures represent a temporary blip or the start of a sustained rise to higher levels.

Should it be the latter, pressure will start piling on the Bank of England to hike interest rates sooner rather than later, in an attempt to stave off dangerously high price rises.

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How to increase and decrease dementia risk

How to increase and decrease dementia riskAn ageing population brings with it certain health challenges, not least dementia.

With cases of dementia forecast to rise to over 1.5m in the UK by 2020, newspapers and various public bodies are focusing on what will become the defining disease of the baby boomer generation.

This week we have read a number of interesting studies and articles about increasing and decreasing the risk of dementia.

The Telegraph reported that middle-aged people should be told to cut out alcohol to reduce their risk of dementia as part of new health checks from the age of 40, under new NHS proposals.

These mid-life health MOTs will conclude that “there is no safe level of alcohol consumption” when it comes to their future dementia risk.

Those in middle age will be informed by their GPs that “…alcohol consumption, even within current guidelines, can increase the risk of dementia, disability and frailty…”  They will be encouraged to reduce the amount they drink by as much as possible.

New research by the National Institute for Health and Care Excellence (NICE) also found that healthy lifestyle changes made by middle-aged people can cut their risk of dementia in later life.

People in their 40s and 50s will be encouraged to stop smoking, become more physically active, drink less alcohol, eat healthily and maintain a target weight.

There is still no cure for dementia and no real prospect of a cure in the immediate future.

What these new guidelines offer is a way for people to reduce the risk of dementia in later life, or at least delay its onset.

We have argued before that a focus on health and fitness is one of the most important investments you can make for your retirement.

Being fit, healthy and having the ability to remain active in later life is the single best way of reducing the cost of retirement and avoiding the need for expensive care services.

Your future experience with dementia in later life is probably already written by the time you are in your 40s and 50s, but these simple lifestyle changes can make the world of difference.

As I commented to a couple of chaps in their 50s last week, we all face a choice as we approach retirement; stay fit and active, or become sedentary and accept the various challenges this lifestyle choice will present.

Which do you choose?

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