What if they raise the retirement age to 71?
🔸 Plus: Taylor Swift is trying to stop people tracking her private jet 🔸 Craig Wright wants to prove he invented Bitcoin 🔸 BrewDog will abandon the “real living wage" 🔸
The bar to retirement might be getting higher.
Hello! Here’s today’s 2-minute guide to demystifying money and making you richer
How raising the retirement age to 71 affects you.
Taylor Swift is trying to stop people from tracking her private jet online.
Craig Wright is in court arguing that he is the mysterious creator of Bitcoin.
BrewDog said it would abandon the “real living wage” pay standard.
Adam Neumann wants control of WeWork again.
Women in Los Angeles are microdosing magic mushrooms before work.
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What if they raise the retirement age to 71?
There was an alarming proposal in the business press this week that said the government should raise the UK state retirement age from 66 to 71. The proposal, from the International Longevity Centre, suggested the government might have difficulty financing the state pension in the future because the number of older people taking payments is outstripping the number of younger workers needed to generate the taxes to support them.
In fact, the age at which you become eligible for the state pension is already set to rise from 66 to 67.
Raising the bar to 71 will not be popular
No one likes the idea of being required to work into your seventies in order to retire.
Realistically, it would be electoral suicide for any government to raise the pension age that high. France recently raised the pension age from 62 to 64 and there were riots in the streets.
And there are other things governments can do to fund state pensions: raise taxes on the wealthy, close tax loopholes, reduce subsidies for industries that don’t need them, and so on.
So it is by no means a sure thing that we’ll all be working an extra four years before our National Insurance contributions finally start paying out.
Nonetheless, the study raises a good point
When the state pension was created in 1909 only about 6% of people lived until they were 65, and those folks could only expect to live another 10 years. Today, three-quarters of people reach age 65 and anyone who gets to that age can expect to live another 20 years. Improved life expectancy is a great thing but it is screwing with the government’s budget. There are many more older people taking payments than there used to be.
That means it’s plausible the government will, eventually, be forced to do something about the state pension to make it less generous.
Smart people — you — know this. Today, the full pension is £203.85 per week. That’s a nice-to-have amount of money. But for most people it won’t be enough to live on. It’s certainly not enough to live well on.
You’re going to need a plan
That’s why Moneyin2 exists.
Get real: The government is not going to come to your rescue.
The person who is best-placed to look after you is you.
The state pension ought to be a supplement to your life plan, not the end goal of your life plan.
We can’t tell you everything you’ll need to know in a single email but if you subscribe and stick with us, we’ll do our best!
In the meantime…
Here are the basics
Enroll in your workplace pension scheme. You’ll pay less tax by doing so (it’s a free money scheme!). Contribute the full amount your employer is willing to match, at least. Aim to save 15% into the plan if you can.
If your employer doesn’t have a pension plan, create your own by opening a Self Invested Pension Plan (SIPP). The government will match any money you put into it by at least 20%. (Just remember that you can’t touch this money until you’re 55.)
If you’re worried you might need the money before 55, use a Stocks & Shares ISA instead. You’ll still make gains tax-free.
Make sure your pension/SIPP/ISA savings are going into stocks with an S&P 500 ETF or a Nasdaq tracker, or something similar. We call this the lazy plan.
This is especially important if you are young or are more than five years away from retirement.
Do this as soon as possible to take advantage of the miracle of compounding.
Automate your savings with a direct debit or a round-up account, so you don’t have to think about it. Even if you have “no money” there are ways to save when you’re broke.
SNAG: Save. Now. Automatically. Get that free money!
Start now. Time is on your side.
And for dessert …
Taylor Swift is trying to stop people from tracking her private jet online. She claims it’s a “life-or-death” security matter, because it helps stalkers. Of course, all billionaires would like it if they could hide their jet use more effectively.
Craig Wright is in court trying to prove that he is Satoshi Nakamoto, the legendary creator of Bitcoin. Good luck with that.
BrewDog said it would abandon the “real living wage” pay standard (£12/hour) in favour of the lower national living wage standard (£11.44/hour). The “punk” brewery claims it cannot afford it.
Adam Neumann is back and he wants to take control of WeWork again. The office sharing founder was kicked out of the company in 2019 after he tried to take it public, exposing its disastrous finances and a leadership style so quirky Netflix made it into a movie.
Women in Los Angeles are microdosing magic mushrooms before going to work. We do not recommend this.
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Photos: Jill Carlson, Flickr; Nicole June, Flickr; Eva Rinaldi, Flickr.