Obscured by clouds
Written by Mark Salter
As I have often said in these monthly articles, work and retirement are not perhaps as black and white for most people as they were back in the day when life was simpler (and life expectancy was lower). You worked until 65 then took your pension and often died 5-10 years later.
Today we live longer, retirement is no longer mandatory at age 65 and it is common to meet successful business owners and executives in their 50s who wrestle with the big question – "When should I retire?" or “What do I need to do to stop work?”
Here’s an example:
Sally is in her mid 50s and came to see me a few years ago. She was a successful executive and still enjoyed (some parts) of her work. She had a number of pensions from various employments and had been using some of her surplus income and bonuses to build up some savings and investments. There was no longer any mortgage on her property in Dorset but she was still spending too much time away from her house and garden. The children had grown up and left home already and she had already helped them with their first step on the housing ladder. However, she told me that she got stressed and bored at work but wasn’t sure what, if anything, she could do about it?
The problem for Sally was that she struggled with change. She found it difficult to think in a lateral way and of course she was so busy with her career and family that it was difficult to find the time to pause for a while and reflect. In other words, the future was ’obscured by clouds’.
The first, and arguably most, important part of what I do as a lifestyle financial planner, is to help you visualise your financial future; to sort through these conflicting areas and to work out "how much is enough" for you to live well after you stop working. This usually starts by asking you some questions that allow you to see the ‘blue sky’ past the rain and the clouds. In practical terms we’ll review your pension and investment provisions, detail your current expenditure and most importantly, the standard of living you want in retirement. We can provide you with a visual representation of your income and assets for the rest of your life. Seeing it in this format is very helpful and can give you the confidence to make the right decisions for you and your family’s future.
In Sally’s case I was able to demonstrate, through a carefully crafted financial plan, that she could leave her job tomorrow and still be financially secure. This allowed her to go back to work in a happier frame of mind knowing that she was now in control of her own future and if she wanted more time in the garden, or more time with family and friends, she could resign if she wanted to.
If you ever have a ‘Sally’ moment, perhaps you should talk to us…