We’re living longer, healthier lives — but that also means our savings need to work harder and stretch further. That’s why creating and following a well‑structured wealth plan is essential to preserving your long-term standard of living.
By making the lifestyle choice to retire in France, you will want to make the most of what the country has to offer, well into the future. And for many, that future may be longer than expected, with today’s retirees enjoying longer lives than previous generations.
French data shows that a man aged 65 can expect to live to 84.7, while a woman of the same age has an average life expectancy of 88.4 – among the highest in the EU. Meanwhile, the UK’s Office for National Statistics’ ‘life expectancy calculator’ shows that a 65 year old man today has a 25% chance of reaching age 92 and a 2.8% chance of celebrating his 100th birthday.
A retirement stretching across several decades does sound rather appealing, provided we are healthy enough. But longevity brings financial implications, both for individuals and for governments. The core question being: can we afford it?
The longer we live, the longer our savings need to last to maintain our standard of living. Comfort and security naturally become more important as we age, and knowing that we can meet unexpected costs provides real peace of mind. Yet many people, including affluent households, tend to overestimate how far their retirement savings will stretch, which can leave the later years of retirement falling short of expectations.
This is why establishing and following a comprehensive wealth plan is so valuable. A good plan takes your full financial picture into account – property, savings, investments, pensions and other assets – alongside your expected annual spending. It factors in inflation, investment growth and longevity to assess how long your portfolio can sustain your lifestyle before its real value begins to erode.
Taking stock now ensures you have the clarity you need to stay on track and make informed adjustments. With a well‑structured plan, you can approach the future with confidence.
Income and inflation
While inflation may no longer dominate the headlines, the cost of living will keep rising. Even modest levels of inflation, compounded year after year, erode the real value of a fixed income and any savings that fail to keep pace with it. That’s why effective financial planning will always factor it in.
For example, if you currently spend €5,000 a month, an assumed inflation rate of 3% a year means you may need around €6,720 a month in 10 years to maintain the same lifestyle, and approximately €9,030 in 20 years. Your income and capital will need to increase in line with rising costs to preserve your standard of living over the long term and ensure your savings stretch for as long as you need them to.
Making your savings and investments last
Many retirees favour low risk, ‘safer’ investments like bank deposits in their later years. But with potentially 30 years or more to fund in retirement, this can be a risky strategy.
British expatriates also face exchange rate risk. If you receive income in pounds while spending euros in your daily life, depending on currency movements, you may find your money does not go as far as it once did, even without the inflation factor.
By following core principles and taking specialist guidance, you can invest capital to give it the opportunity to keep pace with inflation, while keeping risk to a comfortable level. A good starting point is to establish your risk profile, then build a well‑diversified portfolio that reflects your circumstances, objectives and long‑term needs. Look for investment arrangements that offer currency flexibility, helping to limit exchange‑rate risk.
Once your portfolio is in place, be mindful of how much you withdraw each year. Taking too much in the short term, particularly during periods of weaker market returns, can undermine the long‑term sustainability of your funds and reduce your ability to meet future income requirements.
Balancing today’s spending with tomorrow’s security is a common challenge for retirees. But with a well‑structured wealth plan, supported by a sensible investment strategy and drawdown approach, this balance becomes far easier to manage.
A taxing problem – not just for governments
Rising life expectancy is also expensive for governments. The higher the proportion of older people in a population, the greater the costs of services like state pensions and healthcare – and the lower the number of taxpayers that can fund it. The solution usually lies in pension or healthcare reforms and potentially tax increases to finance these escalating expenses.
For individuals, higher taxation can pose a threat to long term financial security. Like inflation, it chips away at your income year after year. In France, the effect can be even more pronounced, with social charges applied in addition to income tax. This makes personalised tax planning essential to ensure you are taking full advantage of the opportunities available to improve your tax position in France.
With many of these arrangements you can combine your tax and investment planning in one exercise, allowing you to tackle the twin threats of tax and inflation at the same time.
Assurance-vie, for example, is a specialised form of life assurance that allows French residents to hold a range of investments in a highly tax-efficient package. Choose the right one, and it can also offer currency flexibility and estate planning advantages.
Getting the most from your pensions
Pensions are often the key to financial security in retirement, so explore all your options and take care to do what is right for you. Establish your income needs and objectives, and analyse the tax implications, investment options, risk levels, currency risk and what happens to the balance when you die.
There may be ways for expatriates to make pension funds go further, more tax efficient, and easier to pass, but before making any decisions, always take regulated advice to establish the best approach for you.
Leaving wealth behind
If you want to leave a lasting legacy for your family, your wealth plan will need to allow for funds to last beyond your lifetime, without compromising your quality of life today. A strategic financial planning approach, that considers estate planning alongside investing and tax planning, will prove invaluable here.
Whatever your stage of life, establishing a clear wealth plan with strategic financial planning
will help you afford the lifestyle you want, for as long as you need, so you can focus on enjoying your retirement in France with peace of mind about your future.
Get in touch with Blevins Franks to start your peace of mind journey today.
This article should not be construed as providing any personalised investment or taxation advice. You should take advice for your circumstances.
