Retirement: It’s ok not to have all the answers – but you need to start asking the questions
There’s an expectation that we should know all the answers about our plans for the future. What’s important to us. Where we want to end up. How we’re going to get there.
That’s especially true when it comes to planning the transition from work to retirement, but for many it can be the most confusing time of life.
In a simple world, you’d leave school at 16 with your life and work planned out, and immediately start paying into a pension that’ll eventually be enough to sustain you through retirement.
But you don’t do that. Because you’re 16. And retirement when you’re 16 is light years away. And when you’re 25 you’re busy building a career, and at 35 you’ve possibly got a family to consider, and before you know it retirement is ten years away, or five, and you really need to get a wriggle on with those plans.
There’s a fair bit to consider when starting to plan for the life you actually want in retirement, but it’s fine to not have all the answers you need straight away.
Not all retirements are created equal
Typically in these blog posts we like to provide answers. But the thing with retirement is that there are no universal answers. The approach to financial planning and pensions will be different for everyone.
If you’ve been a full-time employee most of your working life, you might be chomping at the bit to put the stresses, strains and office politics behind you as soon as you can. This means that your pension income needs to be sufficient and ready to go almost immediately after you retire.
A business owner on the other hand, rarely finds it easy to just to sell up, or walk away from a profitable company (plus it’s their passion and life’s work). The process of retiring for a business owner is usually a more gradual thing, so the pension transition can be slower.
Either way, you’ll need a financial game plan. And while we can’t give you all of the answers in a blog post, we can share some of the questions you should be asking.
There’s more to planning than “how much will I need?”
Let’s hit the big question first. “How much money will I need to have saved for a comfortable retirement?”
That’s the first thing you’ll ask. Because nobody wants to suddenly need to reduce their standard of living part-way through their retirement or find they outlive their money.
The question that should really come before that one should be “What do I want for my life in retirement?” And this is often a question people don’t think enough about. A retirement spent gardening, golfing and volunteering requires different financial planning to one travelling the world, seeing the sights and eating in the finest restaurants.
Then there’s family to consider. “Will I be able to afford to help out my children and grandchildren?” “What sort of retirement will my spouse have if I’m not here?” This can have a large bearing on how you plan for your future.
And of course, there are the technical considerations of your plan – how much more do you need to contribute, which products should you be investing in, limiting tax on your income, lifetime allowance issues, guarding against inflation, choosing the right investment mix. Even something as seemingly simple as “How should I draw my income in retirement?” will have a different answer depending on your circumstances.
It’s OK to not have all the answers
Maybe you’ve read this blog post with a cup of coffee, five years away from retirement, smiling to yourself because you already have all the answers you need. If you do, congratulations!
If you don’t, that’s fine. Because most people don’t. But remember, the longer your head is buried in the sand, the longer you wait to ask the big questions, the harder things get.
We’ve helped hundreds of people answer these big questions over the years (including a few from very left field!) and plan their retirement with more confidence. We’ll be happy to help you too.
Because it’s never too late to start getting the answers. And it’s never too late to ask for a helping hand.
Thanks for reading.