The Good Ship Retirement

If you’ve taken a summer holiday or a mini-break already this year, perhaps as you’ve sunk into a lounge chair in the sun and thought, “I could do this every day.” And then, perhaps, you thought about retirement.It’s true that for some people retirement will mean lounging in the sun and lots of rest and relaxation, but retirement means different things to different people, and the concerns each of us have regarding retirement can vary a great deal. Here are a few of the key issues we often hear from folks who come to see us:

Will I run out of money before I die? I want to know I'll always have enough.
Can I do the things I dreamt of doing when I was younger?
Can I afford to leave my children / grandchildren something to give them a head start?
Could care costs ruin my plans and the plans of my loved ones?
It all seems so complicated and I don't know where to start?
How do I know my money is being looked after?

We come across these issues time and time again and we have great sympathy for people facing them. It’s not easy to keep a clear head in a world that could be very unfamiliar to you. How do you know if you made the right choices?

Build Your Ship

We believe you need to come at the whole retirement issue with a clear head. Well before you start thinking about the details of how you’re going to move forward with your retirement plans, we feel you need to be clear about WHAT it is that you want to do. It’s blank piece of paper time! Let’s create a sketch of the vessel that will carry you out to sea.First, write down all the things you want to do in your retirement. Perhaps you want to go scuba diving and sail around Malaysia, buy a small cottage in Cornwall, or travel the country visiting each and every National Trust property. Write down every adventure you want to take and hobby you’d like to pursue in your new-found free time.Next, make a list of all the people you’d like to help after you’re gone. Whether it’s leaving some money to an organisation you’re a part of, a charity you respect, or your family members, it’s important to list everyone that you’d like to include in your financial plans.Now try to get as clear as you can about what an ideal retirement looks like for you. Where do you want to live? What kind of car do you want to drive? What do you want to do to entertain yourself? Don’t shy away from radical ideas or outlandish dreams. After all, if you don’t plan for it, you won’t be able to do it, so don’t hesitate to write down what you really want. Who knows what’s possible!Lastly, try to attach a figure to all this. This isn’t easy to do, I know, but give some thought to how much income you’re likely to need and what sort of lump sums you’re going to need and when you’ll need them. Write these figures next to each item on your list and tally them up.

Climb Aboard

Once you have a reasonably clear idea of what your retirement looks like and what it might cost, you’re in a much better place than you were and can start dealing with the mechanics of assessing what pension and investment arrangements you have and whether or not they’ll cover what you want and need in your ideal retirement scenario.This is where financial planning comes in. A good financial planning firm will take a great deal of time to understand you and what you want your retirement to be. They will need to go on this journey WITH you to do their best work FOR you.As a financial planner, let me tell you a secret: A retirement plan is always wrong. This may sound a bit dramatic but it’s true. Life is unpredictable and never plays out exactly as we imagine. Even so, having a plan let’s you know if the ‘good ship retirement’ is still on course when life’s surprises are thrown at you. A good plan also helps you adapt and stay positive when things seem to go awry.What makes a good financial plan? Well, a good financial plan will factor in your regular expenses in retirement, your income, the lump sums you’ll need for holidays, new cars, home renovations, etc., and the capital (pensions and investments) you have available. It will use reasonable assumptions about things like investment grown and inflation to tell you if you’re still on track or, perhaps, sailing a little off course.

Sail On Course

I can’t stress enough how important it is to regularly review and adjust your financial projects to make sure you’re sailing on course. There’s no point in putting all the hard work in at the start only to let it unravel because you don’t maintain it. Review! Review! Review!I know I can get on a bit of a soap box about this stuff but that’s because I’m incredibly passionate about financial planning and retirement planning. Helping people live a happy and financially healthy retirement is what I do. Being involved and helping with the fulfilment of their dreams is a truly wonderful thing.Of course, it’s not always possible to do everything you wished for in retirement but it is possible to understand what your retirement could look like, discover how your resources can provide for this and do the work to make sure you stay on track and your retirement really is smooth sailing.