A client of mine once said this to me: “My advice for someone approaching retirement is plan, plan, plan. If Plan A doesn’t work out, have a Plan B, etc.”
Last month, we looked at why planning your retirement needs to start earlier than you think. By starting to consider your life after work up to ten years before retirement, you can whet your appetite for what lies ahead, reconnect yourself with your passions and sample a little of the life you’ll enjoy when you finally hang up your boots.
While planning in advance is really useful, it’s important to remember this: there is also life before retirement. You may be looking forward to the future, but it would be sad to sit in your office every day looking out of the window watching life pass you by.
Don’t put off living your life until retirement or just live for the future. Live for today and appreciate the present, while keeping an eye on your plans for your future retirement.
One of the first parts of planning you will have to do is to decide not at what age you want to retire, but at what age you want the option to retire.
Giving yourself the option to retire
My view is generally that clients should decide at what age they want the option to retire, rather than picking a fixed date.
You shouldn’t be duty-bound to retire at your chosen date, but if you have the financial means to do so then it is great to have the option. You may not be emotionally ready to make the transition, or there might be some very compelling reasons that require you to stay on in your business or your role for longer.
So, from here, let’s talk about planning for the date when you’ll have the option to retire.
The process of thinking about when you might want to stop working and setting a date for this is psychologically important. It makes the idea of retirement seem real, and encourages you to:
- Think about what you will do when you retire
- Visualise your life in retirement
- Make plans for the future.
All these steps make the transition to retirement easier. You can’t put this off and, as we spoke about last month, your planning must start now.
Having spoken to many of our clients, one piece of advice that comes up time and time again is to start planning as early as possible.
Here’s what one client told me: “I planned my retirement with world travels booked, target goals and achievements, which I measured and monitored as I did at work. Nothing has been left to chance, so no surprises.
“I’d recommend this thorough approach to anyone close to retirement. And, of course, you need to ensure you have sufficient money to do whatever you want for as long as you have left!”
Be ambitious with your ‘option’ date
When talking to my clients about planning their life after work, I often encourage them to be ambitious and to set an early target option date.
There are several reasons for this:
- It is no fun being emotionally ready to retire if you don’t have the financial means to do so. It is far better to be financially ready, so when your interest in your job wanes and you are emotionally ready to step away from your business, you have the financial capability to do so.
- The longer you work and stay in the corporate rat race, the harder it is to extract yourself from your ‘corporate’ self and to embrace your ‘real’ self. The earlier you retire, the easier it is for you to reclaim the real you while you are (hopefully) still fit, active and able enough to do the things you want.
- There is lots of evidence to suggest that the younger you retire, the longer you will live. A 2017 study by the University of Amsterdam found that Dutch civil servants over the age of 54 who retired early were 42% less likely to die over the subsequent five years than those who continued working. They concluded that retiring allows an individual more time to invest in their health, whether that is sleeping more, exercising or just going to the doctor when an issue arises. In addition, retirement alleviates the stress caused by working, with the research finding that retirees were significantly less likely to die from stroke or cardiovascular diseases.
Get in touch
Being ready to retire happens at the point where your emotional readiness and financial capacity meet. To achieve this, it’s important to plan – and the first step of this is to decide at what age you want the option to retire.
We can help you to build the retirement you want. Even if your intended retirement is years away, it’s never too soon to start making plans. Email firstname.lastname@example.org or call 0121 313 1370.