Millennials Buck the Trend When It Comes to Retirement Planning

RETIREMENT planning is something that Millennials and Gen-Zers are taking seriously, says MHA Tait Walker Chartered Financial Planner, Leonard Birnie.

While Leonard specialises in the retirement market, he says the focus has shifted and it’s now all about ‘lifestyle’ planning for today’s younger generations who know who they are, who they want to be, and with a bit of help, how to get there.

He said: “The younger generations are no longer purely focused on what their future might look like post-retirement. It’s not just about building up a pot of money over a number of years any more.

“Instead, we are seeing younger people approach us for advice on how a few tweaks to their lifestyle might enable them to achieve something they’ve always dreamed of. We all know that money goes hand in hand with personal satisfaction, but happiness is being measured differently by the young and that means it’s about more than just pounds for Millennials and Gen-Zers.”

Leonard adds that while Millennials have been accused of spending too much and saving too little, he is seeing an increase in the number of young people coming to see him for an overview of their individual circumstances.

He said: “For the Baby Boomers, buying a home and settling down were triggers for seeking financial advice. Now however, changing lifestyles, the gig economy and the irregular income from freelance working means younger people have not been saving as regularly into pensions and ISAs like they used to.

“We have also seen a rise in enquiries recently due to the Coronavirus crisis which has forced some people to rethink their plans for the future.”

Leonard admits that while money, of course, plays a major part in the process, there’s not one-size-fits-all solution when it comes to lifestyle planning.

“For Millennials and Gen-Zers, it’s not about building up a nest egg anymore because the traditional financial advice is seen as unaffordable.

Lockdown has forced many young people to re-evaluate what they are doing and when you don’t like what you’re doing and know that you’d rather be doing something else, lifestyle planning can help you make the transition.

“Instead of asking yourself how much you need to save, you need to really think about whether you’re willing to change your lifestyle to achieve your goal.

“Everyone has their own definition of what will make them happy. Prior to doing anything, you need to look at your motivation and your financial resources and then work with an expert on a plan that will get you there.”

Case study:

Louise Bradford, 34, is managing director of Creo Communications, in Sunderland. She loves running a business and takes real satisfaction from creating jobs in the region. She has been working with Leonard on managing her money for both lifestyle and retirement reasons.

She describes the different sources of pension income she has built up during this time.

Louise is married and mum to three-year-old Flynn. She said: “I set up my business six years ago. However, retirement planning probably wasn’t on my radar until I became a mum three years ago. It was this life-changing moment that meant I suddenly started thinking more seriously about the future for all the family.

“I had a conversation with Paul Shields from MHA Tait Walker, who I had been working closely with on the business side of things and he introduced me to Leonard Birnie from their Wealth Management team.

“Initially I wasn’t sure what to expect, but with Leonard being a similar age as me he had a real understanding of where I was in life and where I wanted to be. We worked together so that I could set both professional and personal goals for the future.

“He also asked me some really illuminating questions about my attitude to risk. I’d always thought of myself as someone who was risk adverse until our conversation and I suddenly realised that I am actually the polar opposite of that!

“I now understand more about the options I have when investing money, so that I can do it in a confident way. I have a pension, ISA and a savings account for my son, but I also have properties that are rented out and I hope they will help me when it comes to retirement. Until my conversation with Leonard, I hadn’t really planned for retirement and he made me realise the importance of not solely relying on one area of my portfolio.

“If there was anything I’d have done differently to plan for my future, it would have been to speak to Leonard a long time ago! He has helped me to make smarter choices around planning for the future.

“Thanks to his advice and support, I was financially prepared for my recent house and office move during lockdown. I also know that despite everything that is going on with the pandemic, I am financially secure enough to support my family.

“I have made some practical changes so that I can save money and I know I am preparing for my future goals. However, it is also important to be able to enjoy myself now and while I don’t have a set budget for holidays or eating out, it’s good to find the balance between the two.

“Leonard has helped me to create a lifestyle plan which fits in with my future goals and milestones, giving me more security for the future, and more confidence about what I will be able to achieve.”