How financial planning can give you back the power of choice
Are you getting close to retirement age, but feel like you’ve only got limited options?
Sometimes, it can seem like a straight choice between two alternatives.
Either you’re compelled to keep going in a job that you merely tolerate rather than enjoy. Alternatively, it’s stopping working, even though you consider yourself too young to be ‘retired’.
At this juncture, any other option - let’s say, starting a new business, becoming a consultant, or sitting on a board as director of a charity - might seem too much of a risk. Wouldn’t it be great to know that you have the financial backing to choose what you’d actually like to do with your time?
Speaking to a financial planner can help you do exactly that. It can help unlock choices that you’d never even considered.
Your needs are more than just the money you earn
When you’re starting your career, things seem pretty simple.
You need money. It’s essential both for right now (your general living costs), and the future (saving for anything that isn’t right now).
Over time, your earnings increase, and savings grow. As big debts such as mortgages get smaller, the need for money isn’t quite the same, but we still need a purpose: the motivation to keep going. For many, working fills that need, so taking it away can be hard to do.
It’s why some people who retire can feel like they’ve lost something when they no longer have the motivation of catching the 7am train to the office, or the mental stimulation from problem solving. Retiring can seem like it’s robbing you of the sense of purpose you’ve had your whole career. It’s no surprise some studies have found retirement (which everybody tells us it’s relaxing) can see an increase in depression. One report from IEA estimated retirement increases the probability of suffering from clinical depression by about 40%. So how do we combat it?
Unlocking the potential of purpose
Many people feel paralysed by wealth when they manage it alone. Even as salaries and bonuses start to rise as you go further into your career, it can be very difficult to shake the feeling that you might not have ‘enough’.
But the sense of purpose can be the difference between living… and living well.
There’s some astonishing research around this area. As featured in the Netflix TV series Live to 100, researchers have investigated communities in what they call Blue Zones across the world, made up of communities with extremely high proportions of 100-year-olds and very low mortality rates.
They’ve used these communities to study longevity, having a better quality of life into your older years. One of the key factors that link these communities is they all have a strong sense of purpose. It’s believed this is worth up to seven years of extra life expectancy.
So rather than being trapped by wealth, we need to find ways to pursue purpose instead.
The power of choice
You could think of it as your life split into two halves.
The first involves accumulating what you need, the financial backing and security.
The second half is where you get to benefit and do something with purpose. This isn’t to say that your working life can’t be brimming with purpose, only that in the second act, you’re more likely to have the wealth and the time to make it happen.
What if you were financially secure enough to start again with a blank sheet of paper? What would you most want to do? This could be opting for a period of semi-retirement or flexible working, working as a consultant, or even starting a totally new venture.
Consulting a financial planner can help these conversations and enable you to focus on that sense of purpose.
Together we can:
Step 1: Help you understand your cashflow. We can help you answer the main questions: What do you need to be comfortable? How much will earning slightly less or winding down impact your overall retirement pot? What do different retirement options look like?
Step 2: Bring you financial freedom. With a clear view of your cashflow assumptions, we can understand how much of a safety net you have for the lifestyle you’re looking for.
Step 3: Permission to aim high. Money doesn’t buy you happiness per se, but it does buy you your power of choice. You may not be able to fulfil all your wildest dreams. But you might find out that you already have what you need, to work to live, rather than living to work. Some find this out too late – some never at all.
So, if traditional retirement doesn’t seem like an option you want to take, then now’s the time to think about putting your purpose – and yourself – first.
What would you do if you could start from scratch – what would that look like?
Are you already financially secure, you just don’t realise it?
Speak to Nicola to find out.
And if you know someone else who could benefit from our advice? Please feel free to put us in touch.