When can I retire?
We are often asked “when can I retire?” when we meet with new clients, and there is a common misconception that the answer is when their State pension starts.
Well it has far less to do with that than you may think.
The answer to the question “when can I retire?” may be as soon as TODAY!!
Imagine you sold everything you owned, stuck all that money in the bank and moved to Outer Mongolia.
The chances are you could live the rest of your days without running out of money.
The lifestyle you’d live is probably far removed from what you want it to be but you could ‘retire’.
Therefore, the question shouldn’t be “when can I retire?” be, “when do I want to stop working and be able to enjoy the lifestyle I want, without the fear of running out of money?”
The answer to this question is trickier and dependant on a far wider range of variables, but it does not need to be linked to your State retirement age.
What does your ideal retirement look like? When do you want to be financially independent? What will you do with your time? What will you want to do more or less of? Will you want to continue to work? Will you sell your business, if so, do you know how much it is worth?
Once you have written down what you would like your retirement to look like, you can start to work out how much that lifestyle will cost?
Until you have considered and answered these very important questions, you will not really be able to answer the most important question, which is when this can actually happen?
This is where we can help
We are financial planners, and as the name suggests we help people like you to organise their finances and plan for the future they want.
We’ll ‘take a photograph’ of your current circumstances, income, expenditure, assets and liabilities and details of your existing savings, investments and pensions and use a cash flow forecast to assess what your future may look like.
We will then work with you to help you to visualise what you want your future to look like, and we will get very specific on this. We hear lots of people saying that they will spend more time in the garden or on the golf course when they retire and that they will travel more.
This is great but for you to want to save towards something it is going to need to be inspiring and exciting, something a little more specific.
Being specific about what you want to do with your time allows you to plan for it and we can assess whether you are on track to achieve that or whether you need to commit more towards your ideal future.
When you start receiving your State Pension, which will obviously form some of your retirement income, plays a part in answering this question but by taking control of the situation you are able to dictate the terms of your retirement.
It may require you redirecting some of your income now and deferring that spending until you retire, but if this means your retirement being on your terms, it will give your pensions and investments a purpose.
If you don’t know what you are saving for, your enthusiasm for saving will dwindle. This will leave you reliant on the state and more than likely you will not have enough money to do all those things you’ve dreamt of doing.
Life isn’t a rehearsal and so you can’t come back next time and do things differently. When you are sitting back in your rocking chair do you want to be remembering all the great experiences and memories from your retirement or will you be sat there regretting the fact you did nothing about fulfilling your dreams and cursing the fact that it is then too late to do anything about it?
So, when you come and see us and ask, “when can I retire?” our response is likely to be “when do you want to retire and what do you want to do with your time?”
We can then work together to help you have the retirement you want.
It’s your future, take care of it.