By Michael Youngman, Financial Adviser, Cambridge Partners
Determining the right time to retire is difficult as there is no one-size-fits-all approach that can be adopted. It goes without saying the key determinant in deciding when to retire is having sufficient financial resources for the retirement you desire. Being in this position not only relieves stress but, more importantly, allows you to be in control of the decision-making process. Therefore, spending time to develop a retirement plan is especially important as it details what you want to do in retirement and assists in determining the required resources.
What’s on your bucket list?
When developing a retirement plan, it is important to involve your spouse (if applicable). While you may want to retire, if your spouse intends to continue working for many years, retirement may be lonelier than you expected, or you may not be able to do the things you had planned in retirement. The basis of a retirement plan is to detail what you both want to do in retirement and put a timeframe on this. A common way to do this is to create a “bucket list” or list of all the ideas you both have and then together prioritise the ideas. Your bucket list may include items such as travel, new vehicles, moving home, spending more time with family or undertaking voluntary roles. It is important the list is flexible and allows for new items to be added and others removed as your preferences change.
Understanding retirement goals
As you approach retirement, your financial adviser plays an important role in updating your progress, quantifying the financial resources required, updating your retirement plan as your situation changes and, importantly, stopping you from deviating from the plan. As you approach the point of having sufficient resources, it is important to consider the timing of the decision by first considering whether the timing feels right to you (and your spouse if applicable). You may be in the middle of a major project or had a change in employment role that has reignited your passion for your work and may wish to delay retirement. Conversely physically, mentally and emotionally it may continue to be the right time. Depending on your role, consideration should be given to having an open discussion with your employer. If you are a key person, a longer notice period provides your employer more time to train your replacement and provides better continuity for clients and colleagues.
Finishing work
While some people prefer to gradually reduce hours, others may set an age (or finish date), the completion of a project or an event in the family as the most appropriate time to retire. Regardless of how you bring your working career to an end, it is important to ensure you have the financial resources required for the retirement you desire.
The importance of a Financial Adviser
Once you retire, your adviser can monitor the draw down process to ensure financial resources aren’t depleted too quickly. Regular reviews help to monitor progress and identify the impact of changes to the plan. Your financial adviser is trained to help navigate you through this process and provide you with peace of mind.
Do you think you are ready to take the first step? Book a call with us today for a no-obligation chat.