People often spend more time planning a holiday than they do a potential 30-40 year retirement.
Most people long for it, some dread it, worrying that retiring may result in loss of purpose and sense of identity.
How will they fill their time once the daily hustle and bustle of work comes to an end?
In my experience, people in this category are the ones most likely to expend a little more time thinking about it.
The retirement finishing line
It’s those that have a dream of reaching what they see as a retirement “finishing line” that sometimes don’t really think about what this new chapter in their life might look like – it’s just all about getting over that line for them – but then what?
Understandably, people often associate financial advisers as someone who may “sort out their pension” which of course we do.
However, this is often the final piece of the jigsaw in a retirement planning process where we ask people to really think about what their retirement might look like?
We ask lots of questions, sometimes challenging questions such as:
-How are you going to get on spending so much time in the company of your spouse, when for the last 30 years you have both been at work all day?!
-What are you going to retire ‘to’ rather than ‘from’? In other words what will fulfil you?
-How are you going to find the right balance between having a purpose to get out of bed in the morning and enough money to sleep at night?
When we get to the bottom of what people really want from retirement, financial questions start to be asked of us.
-Do I have enough?
-How much do I need to save?
These are two of the most common questions we face as financial planners. We believe that the most comprehensive way of answering them is by creating a bespoke retirement plan, using financial planning technology.
Lifetime financial forecasting
Forecasting what will happen to people’s money, pensions and investments etc based on prudent assumptions and stress testing this plan, shows whether they have enough to live the life in retirement that they ideally want to lead.
It may show that they need to save more, work longer or consider transitioning into full retirement with part time work.
Numerous calculations can be factored into a thorough retirement plan such as what do with pension tax free lump sums, projected annual expenditure, holidays, replacing cars, state pensions kicking in, house improvements and downsizing, gifts to family, possible fees for long term care, tax rates, inflation and many more.
If retirement is in your thoughts, make sure you ask yourself:
-what am I retiring to, have I really thought about what I’ll do every day in the harsh IOM winters!? Will it leave me happy, busy “enough” and fulfilled?
-whether your retirement “numbers” are robust and have they been fully stress tested? What you have, may need to last 30-40 years!
If you would like to have a free chat with one of the three Chartered Financial Planners working here at Thornton, please feel free to contact us at mail@thorntonfs.com or on 01624 660220
