Half of over-55s never talk to their loved ones about their retirement goals. Here’s why it matters

You might think of goal-setting as a young person’s game. At the beginning of your adult life, the world really is your oyster; getting married, travelling the world, buying a home, and progressing up the career ladder all hover on the horizon.

However, after reaching their 50s, many feel that the time for goal-setting is over, or if they have ambitions, they may not share them openly. This is particularly true where finances and retirement are concerned, with Standard Life reporting that half of over-55s never talk to their loved ones about finances and retirement goals. This stands in sharp contrast to the younger generations, who are said to be pioneering “loud budgeting” and being very vocal about what they want to achieve in future.

So, why is it so crucial to keep setting goals and discussing them with your loved ones, especially as you approach retirement? Keep reading to explore key answers to this all-important question.

The transition into retirement may affect your mental health, so remaining goal-oriented is crucial

You’re likely looking forward to retirement – hanging up your boots, focusing on your hobbies, and spending more time with family could be all you think about these days.

But if you’re a busy business owner or executive, you may gain most of your social interaction during office hours and could take on a sense of purpose from your work. When this stops, especially if you opt for a “hard stop” retirement, you could find that your mental health is affected, with feelings like depression and anxiety rising to the surface.

While this might not happen to you, it’s important to keep setting goals and find ways to gain a sense of purpose when you retire.

Sharing ideas with your loved ones, such as travel bucket list options or a new hobby you want to focus on, could make your goals feel reachable, and you could find it enjoyable to start planning together.

Keeping your financial and lifestyle goals to yourself might impede your progress towards them

When it comes to discussing your financial objectives as you head into retirement, you might initially find it easier to keep these to yourself. Perhaps you’re of a generation that typically doesn’t discuss finances in granular detail, even with close members of your family.

However, there are significant advantages to talking about your financial goals.

For instance, if you plan to start drawing from your private pension(s) at 60, this may affect those around you. If you’re providing financial support to a child or grandchild, this might need to slow down or run out completely once you stop earning and start decumulating your pension.

Similarly, the lifestyle you share with your spouse may change, and together, your tax liabilities could be affected (more on this later). All in all, you could find yourself making lifestyle changes once your income alters after retirement.

With all this in mind, it’s clear that keeping your goals to yourself might be detrimental to your retirement overall. So, although it could be counterintuitive, make sure you’re discussing what you want to achieve, and the financial side of things too, at every stage.

Family financial planning can help to mitigate tax and avoid costly disputes in future

As you read above, there are also fiscal benefits to sharing your financial goals with your family, especially as a retiree.

Doing so could help you:

Mitigate tax

If you and your partner are both planning to retire at similar times, your Income Tax liability is likely to change. Remember, you’ll likely pay Income Tax on a portion of your personal pension drawdown on top of the State Pension and some other forms of income.

You could also be liable for Capital Gains Tax (CGT) if you dispose of shares outside of an ISA or properties that aren’t your main home. Planning ahead together could help you share key tax breaks and ensure you’re keeping more of your wealth.

Make a joined-up estate plan

Together with your spouse or civil partner, you’ll need to start thinking about your “estate plan” – that is, what you plan to leave behind when you pass away, and to who.

Doing so independently could mean your wires become crossed and your family’s Inheritance Tax (IHT) bill may rise as a result. So, keep discussing your goals and objectives with one another for a more joined-up approach.

Read more: The surprising benefits of choosing a “living legacy” for your loved ones

Remain on the same page and avoid family disputes

Sadly, Today’s Wills and Probate reports that between 2014 and 2024, inheritance disputes surged by 140%.

While it’s not always possible to entirely protect your estate from disputes, being open about your finances and sharing your plans with your wider family keeps everyone on the same page from day one. This might reduce the chance of unwelcome surprises later on, perhaps helping your family to avoid a costly dispute.

Keep everyone informed in case of emergency

Emergencies can happen out of nowhere. The Standard Life report reveals that 40% of over-55s have not discussed their bank details, insurance documents, and wills, nor how to access these important documents in case of the unexpected.

Opening up the conversation and sharing these details with your loved ones could help to ease their stress if an emergency takes you by surprise.

Get in touch to learn more about goal-oriented financial planning

Working with a financial planner can take retirement preparations from a headache to a source of excitement.

We’re here to mediate all-important family conversations, help you focus on tax, and ensure your plans for the future are on track for success.

Email us at [email protected], or call 01273 076 587.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, will writing, or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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    About the author
    Picture of Oliver McDonald
    Oliver McDonald
    Oliver is the managing director and independent financial adviser at Engage Wealth Management.
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