Choosing The Right Car In Retirement

Written by Sally Perkins

Today’s retired Americans – ‘Baby Boomers’ – own 70% of the country’s disposable income, making them the most likely to be able to spend out on expensive holidays or valuable assets. One asset retirees may want to invest in is a car. This may be particularly relevant to those who want to make the most of various road trips. Or it might just be that certain retired people want to update their car as a way of celebrating such a significant milestone. Whatever the reason, it is important to weigh up a number of key considerations before deciding what type of vehicle to go for. 

Consider the purpose of your motor

The most suitable car for you will depend on the size and style of vehicle you need. This, in turn, will depend on what you will be using the car for the majority of the time. If, for example, you are likely to be using your car most days, or have family you’ll often be giving lifts to, you may find a larger automobile the most appropriate. With 80-97% of American vehicles projected to be SUVs or trucks by 2022, this would be a popular choice. On the other hand, if you are only likely to be using your car occasionally, or for short journeys, a smaller car that is probably cheaper to run may be the best option for you. It is also worth considering how long you want the car to last. Are you, for instance, looking for something that will last for a considerable number of years, or are you likely to want to update the car again in a few years’ time? These factors will influence how much you should be looking to spend and whether you should for a used car or something new.

Don’t forget about maintenance costs

It goes without saying that the upfront cost of a car is just the beginning; the maintenance of the car is where the real costs start to quickly add up. This can be particularly true in the case of used cars, when the risk of problems arising is higher than with new cars. Drivers will often be covered by a three year warranty when buying a new car; used cars don’t come with this benefit, making them more of a risk in that sense. With maintenance costs for new cars (including tire changes) hitting an average of $99 per year, it is imperative you get an up-to-date history of any car you are interested in buying. Whether you opt for a new or used car, large or small, be sure to research thoroughly any aspects that are known to be problematic and pricey to maintain. This can help you gain clarity and lessen the chance of you having unexpected costs early on.

Prioritize the safety features of a car

Of prime importance when it comes to purchasing a car is safety. Strict safety regulations for new cars, along with the focus on safety features in the design of modern cars, mean that new cars are likely to be a safer option than older models. The emergence of features such as Automatic Emergency Braking (AEB), Blind Spot Detection and lane assist helps keep drivers and pedestrians safer on the roads, whilst also helping to keep you more relaxed and confident behind the wheel. This might be particularly appealing for older drivers who tire more easily, particularly when it comes to lane assist, which recognizes when the car is veering out of a lane and immediately guides the steering wheel back into the correct lane.

Consider leasing a car

One option to consider when it comes to updating your car is to lease one, rather than buying it. This is increasingly popular among drivers, with over 30% of new cars leased in America in the second quarter of 2018. Leasing involves paying a monthly cost for a car and offers you the benefit of driving a brand new car for a given number of years. Whilst you wouldn’t actually own the car, leasing has the advantage of providing you with a reliable vehicle under a manufacturer’s guarantee at a cost far lower than the depreciation of the vehicle. The downside of leasing is that you do not end up owning the car and you must have the car for a fixed term. It is also extremely costly to end the contract early.  

The takeaway: take your time to decide

If you are retiring and fancy treating yourself to a car, then you no doubt deserve it. However, purchasing a car is an important decision that obviously involves parting with a lot of money. For this reason, be sure to think carefully about your circumstances and the types of vehicles that will best accommodate your needs. Safety and affordability are key, so make sure you do your homework on the sums involved and the safety record of any model you are interested in. Think carefully about whether to buy a new or used car, or whether to lease. Finally, test drive any car you are considering, preferably at different times of day and with at least one passenger on board. This will give you a sense of what driving the car is like in different conditions, whilst also enabling you to receive honest feedback from others on their experience in the car.

Investment Options for Retirees

Written by Veselina Dzhingarova 

As you get older, you may want to establish some financial security for you and your family, and you may start to consider the different investment options that are available to you. Entering your retirement period means you will no longer be earning a wage each month and instead you will be on a fixed income.

Many retirees aim to supplement their pensions as well as providing some financial security for their loved ones. This is where investments come in. By investing some money, retirees can create a form of income while also offering a sense of security and peace of mind. However, it can be difficult to know where to invest your money, so here are some of the most popular investment options for retirees and some of the positives and negatives of each.

Rental Properties

Investing in the housing market is a very popular investment for people of all ages. Renting out properties is a safe investment as people always need a place to live, so injecting some money into a decent house to rent out is a logical choice. If you have the money or credit to buy a house, then having tenants to rent it out to will help you pay for it. Not only could investing your money in rental properties give your monthly income a boost, it can also be a great long-term investment as you will one day own the house outright for you or your family to enjoy.

However, there are some negatives about investing money into rental accommodation. It may not be an option available to you if you don’t have the initial funds to buy into a property. Additionally, being a landlord can sometimes be a difficult job if you get non-paying or troublesome tenants. If you are looking for an easy investment option that will require little involvement, then rental properties may not be the best option for you.

Trading

Trading on the stock market is one of the more popular investment options amongst retirees as you can get involved from the comfort of your own home. Platforms such as easyMarkets are offering easy to navigate and accessible platforms that are equipped with the instruments needed to make a success of trading investments.

Traditionally investment trading was considered to only be an option for those with considerable amounts of money to invest, but easyMarkets helps you to invest no matter what your financial circumstance.

Insurance

This may seem like a less obvious form of investment, but by taking out an insurance plan, you are making long term plans for your loved ones. Most insurance policies have different payment options so that it is affordable no matter what your current income, and there will be a considerable payout at the end of the insurance plan.

Interest Bank Accounts

A simpler investment option could be to open an interest-bearing account. This is a more popular option among retirees with savings as you could make money from the interest collected as your money sits in the account.

With these types of bank accounts, you are not risking any of your money and will gain any interest that it creates. However, for this option to be financially worthwhile, it would require a considerable deposit for much interest to be made.

If you do think this investment option would be good for you, then be sure to research some of the best offers at your local bank and shop around for the best interest rates. Deciding where to invest your money is a big decision, but if you research your options carefully and don’t make any impulsive choices, then you can make profitable investments during your retirement.

How Do People Around The World Plan For Retirement?

Written by Sally Perkins

Globally, most governments provide for some form of social security and retirement income. But as human lifespans are increasing by approximately three years every generation, there is a global trend of governments pushing back the age at which retirees can claim social security benefits. With government retirement schemes struggling to accommodate a growing population of retirees who are living longer than ever, the burden of saving for a comfortable and fulfilling retirement is increasingly being passed on to the individual.

The rule of thumb for financial planning is to assume you’ll need about 70 percent of your pre-retirement earnings to maintain your standard of living into retirement. In the United States, Social Security benefits will cover about 40 percent of your income, but unless you can count on some kind of windfall before your mid sixties, that leaves a 30 percent gap that either needs to be funded by a retirement savings account or a drastic lifestyle change.

As you think about your own retirement plans, you might take inspiration from how other workers around the globe prepare themselves for their retirement, financially and otherwise.

Going Dutch

The Netherlands regularly ranks among the best pension systems in the world with benefits from the 3-pillar pension system amounting to about 70 percent of pre-retirement income. There’s many factors that explain why this system is so healthy, but a key piece is that pension funds are compulsory, much like paying into Social Security in the US, only in the Netherlands it generally provides enough to live on comfortably during retirement. But for younger workers who make a good income and want to invest their money more aggressively, this system can make them feel handcuffed as their earnings have to go into the same investment pool with the earnings of older workers for whom risky investments wouldn’t be prudent. And as the lifespan of its population is growing, starting in 2022 the age of retirement will be linked to life expectancy and Dutch workers may need to wait even longer to access their pensions.

An Aging Southeast Asia

Compulsory retirement at a certain age for private sector employees has generally been deemed discriminatory in most nations, but is still in effect in Singapore where, under the Retirement Age Act, employers can mandate retirement starting at age 62, the minimum retirement age nationally. Thailand has a population that is aging faster relative to other Southeast Asian nations, and in spite of statutory severance pay for workers age 60 and over, most Thais have no post-retirement income plan. In Malaysia, workers must fund an Employee’s Provident Fund (EPF), but as with US Social Security, it’s rarely enough to provide a livable income post-retirement and workers are encouraged to find strategies to save for retirement.

UK Workers Push Past Retirement Age

More than 1.4 million over-65s in the UK continue to work at least part time, either because they need to make ends meet or simply because they want to. There’s a certain stigma around retirement, that it’s the end of something rather than the start of an exciting new chapter, which has contributed to many working past retirement age for fear that they will feel useless or lose their edge without work. There’s also less incentive to retire in the UK since workers can continue to work beyond the State Pension age and still receive their State Pension. But according to the Office for National Statistics, health and wellbeing often increase while depression and anxiety fall once workers are no longer burning the candle at both ends. The tradeoff may be well worth it.

Swedish Death Cleaning

One of today’s trending retirement routines comes from Sweden where the act of “death cleaning” helps people prepare for the last act of their life. Honestly less morbid than it sounds, Swedish Death Cleaning is about enjoying the process of going through and paring down your possessions to be able to focus on the really important things. It’s also an act of respect for your loved ones who ultimately end up responsible for your things when you eventually pass away. People in Sweden – and worldwide – have found that downsizing earlier in retirement not only simplifies one’s day to day life, it lifts a psychic weight that makes retirement more carefree. Downsizing – a Global Trend?

Minimalism isn’t unique to Scandinavia, though they seem to have perfected it. Worldwide retirees are finding that by shedding worldly possessions or attachment to a place, they are prepared to travel in retirement or settle in another country where their retirement savings can stretch much further.

While the specifics of retirement schemes may vary from one country to the next, it’s fairly universal that people all over the world must plan ahead to be able to have financial freedom in retirement. Whether that’s saving money on top of pensions or preparing to live a more streamlined and affordable life, foresight is the key.