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Reduced finances 'could surprise many retirees'

Reduced finances 'could surprise many retirees'
5th November 2008

The reality of retirement may not turn out as many people expected, an older people's charity has said.

It is "common" for people to discover that they will not be able to maintain their current standard of living on a reduced income in retirement, a spokesperson for Age Concern has stated.

As a result, people often choose to work for longer or they return to work after their initial retirement in order to supplement their incomes, she added.

"But even if people have a reasonable income from their pension and other investments, unexpected costs can often take a bite out of their finances and a period of adjustment may be necessary," the spokesperson warned.

According to the Cost of Retirement report recently released by Life Trust Insurance, retirement costs a typical UK household £413,000 and costs an individual living alone £326,700.

It has advised people to account for increasing longevity when planning their retirement finances, with the cost of retirement for someone who lives to 100 said to be £708,500.

The figures were based on a long-term inflation rate forecast of 2.3 per cent - but warned that the above figures would rise if inflation remained at today's levels.

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