⏳ Reading Time: 9 minutesRetirement is no longer just about accumulating wealth. Cashflow planning and sustainable income are becoming central to modern investing. Our special contributor and Daily Telegraph columnist David Stevenson explores more.
My maternal grandmother always pulled me aside every Saturday morning when I visited her in an old folks’ home and warned me that the more you have, the more you worry about keeping it. At the time, as a teenager, I thought she was referring solely to my earnings from my reasonably well-paid Saturday job, but I now realise she was revealing, in a cryptic way, a truth for modern society.
We may not acknowledge it, but we are immeasurably wealthier as a society than ever before, especially those over 40, but with greater wealth comes a crushing concern. We’ll live longer – hurrah – but we’ll also spend more money precisely because we’ll live longer – grumble – and thus the preservation of wealth and the adjacent question of how to draw down that wealth in our retirement has become incredibly acute.
This concern is especially acute amongst the 45 to 54 age group, where one study found that 70% fretted over insufficient savings even though they were at peak earnings. And in case you think it’s a peculiarly British or European problem, ponder the recent data release by Apollo Chief Economist Dr Torsten Slok, who revealed that nearly “half of working-age Americans don’t have a retirement account, with the shortfall most acute among younger, less-educated and lower-income workers”. Presumably, amongst these poorer Americans, generating income in retirement takes second place to simply amassing more capital to start retirement.
