16/11/18Looking beyond the finances when planning for retirement
Deciding to retire is a huge decision. But it’s often one that focuses on finances rather than your aspirations. However, giving up work is about a whole lot more than whether you can afford to.
Finances undoubtedly play an important role in your retirement. Yet, focussing on just money matters can mean your retirement falls short of expectations. What you want from retirement could be vastly different to someone else who is approaching the same milestone. Defining your life after work, beyond the finances can help you achieve a fulfilling retirement that suits you.
Choosing when to retire and what you’ll do with your extra free time isn’t just a financial choice. Often, it’s one that’s psychological and social too. If you’ve been planning your retirement and only looking at what your projected income would be, you’re focussing on a very small part of what your retirement is.
Answering these questions can help you to start to think about the type of retirement you want.
1. What does your ideal retirement look like?
Take a few minutes just to sit back and consider what your ideal retirement would be. For some, it may be ticking some holiday destinations off their bucket list. For others, it may be spending more time with young grandchildren. If finances aren’t considered, what would you want to do? Considering what your perfect retirement would be can act as a starting point for setting out goals and income. Your priorities as you head into retirement should set the foundation for your plans.
2. How will you fill your days?
When you think about what you’ll do in retirement, it’s probably big plans that enter your head to begin with. Or you might say, ‘I’ll spend more time on the golf course’. But that’s not normally enough to fill your days. Without work commitments, you’ll have hours to do with as you please. It can seem like an exciting prospect, and also one that can lead to unfulfillment if you don’t have any sort of plan.
3. Do you want to give up work completely?
In the past, you reached retirement age and that was it for the world of work. However, times have changed, and you have a lot more freedom to choose how to retire. Work plays a big role in your identity, as well as offering a social aspect. If you’re not quite ready to give up work completely there are many different options, including working part-time, freelancing, and consulting. You could even launch your own business. Alternatively, volunteer work can help give you some of the same structure as work did.
4. Will you stay in your current property?
Do you see yourself living in your current property throughout retirement? If so, is it likely any adaptions will need to be made? While the answer to this question will affect your finances, it also plays a role in your lifestyle. You may want to stay close to family and friends, move out of a city, or opt for a retirement community with amenities on-site.
5. What are your concerns as you approach retirement?
It’s completely normal to have some worries as you approach your retirement. Taking some time to consider them now gives you an opportunity to put your mind at ease before you tick the milestone off. While finances are often one of the biggest concerns, there are many others too. It’s common to be apprehensive about giving up work after dedicating so much time to your career.
6. If care was needed, what would you want?
Nobody wants to think about care. But more of us are needing some level of support as we enter our later years. There is a range of choices when it comes to care and deciding what your preference would be, and making them known, can help ensure you’re wishes are followed. Discussing potential care with loved ones can help give you peace of mind too, they may be able to reassure you that they’ll be in a position to offer support.
7. How long is your retirement likely to be?
In the past, 20 years in retirement was considered normal. Today, it’s not unusual for people to spend 30 or even 40 years enjoying their retirement years. This obviously has an impact in terms of money and ensuring you have enough pension. However, it may also affect your lifestyle choices and how you decide to spend your free time.
With a better idea of what you want retirement to look like, you need to link this to your pension and other savings. This is what financial planning does; align your goals with your finances. Engaging with a financial planner as you approach and prepare for retirement can help you achieve the retirement lifestyle you’ve been looking forward to.
Please contact us to start your retirement planning, with your aspirations placed at the centre.