October 2024: Transitioning to Retirement
We face many important transitions during our lifetime. Arguably, the most important is the transition from our working life into retirement.
I had lunch recently with a practice owner who is currently in the middle of selling their practice and it is interesting how many issues this can bring up.
Our clients go from being busy, respected for being qualified dentists, and waking up every day with a purpose, to a blank page from which to craft a new life.
We go from saving money and building wealth to needing to withdraw from our nest egg. Sadly, some successful and respected people go on to have unhappy retirements.
For those who saved diligently, this is a sad outcome.
The key to making a successful transition is to be clear about what you are leaving behind and moving towards.
The Three Key Retirement Questions
In helping many people navigate this once-in-a-lifetime transition from practice to retirement, I have identified three key questions to help you experience a successful retirement.
I have adapted these three questions from financial expert Mitch Anthony.
With longer life expectancy comes longer retirements, it’s important to go into this phase of your life with a plan. Taking the time to really think about these questions can set you up for the happy, fulfilling retirement you’ve earned.
Q1: Have you had enough of work?
While you may not have the same drive as before, many successful people have more than they want to contribute to their work environments.
It may be possible that you can continue to enjoy the mental stimulation of being involved without working full-time. The modern work environment has created flexible work options not open to those of past generations.
Remote work, hybrid office structures, part-time consulting, or even mentoring could be a way to remain involved in the industry you love and give you a reason to get out of bed in the morning.
Regardless of this decision, it is essential that you are emotionally ready to transition away from work as you knew it. Do not underestimate the magnitude of your work’s contribution to your well-being and identity.
In summary, question one is purpose-driven.
Q2: Do you have enough?
It is important to understand what lifestyle your savings are realistically able to sustain.
Be mindful of day-to-day expenses, irregular outgoings, and possible surprises not least of which might be any changes to taxation announced tomorrow.
Our process is designed to help you make sense of the complexities behind this simple question: Will I run out of money?
If an initial analysis gives an unexpected answer, consider that even an extra year or two of saving can make a significant difference in these projections. Ensure that you have received a detailed opinion from an expert before you make any irreversible decisions.
In summary, question two is money-driven.
Q3: Do you have enough to do?
This is often the most challenging question to answer for those happily busy for three to four decades.
How will you fill your time?
When you are accustomed to working full days, an empty calendar can be difficult to navigate. Sadly, a two-week holiday is not a reflection of what you may want to fill your days with.
Those around you may still be in their everyday routines, leaving you with more time than you know what to do with. There are only so many rounds of golf you can play or TV series you can watch before you get bored.
We suggest you think carefully about what your ideal week will look like. Be sure to build in time for family, hobbies and travel. If there is too much time unaccounted for, it is worth reflecting on whether you are ready for this big decision.
Lastly, if you and your partner are not used to being around each other all day, it is important that you agree on what you will be spending your time on and how you will each retain some independence.
As the joke goes, retirement is twice the spouse and half the income.
In summary, question three is lifestyle-driven.
A Happy Retirement Is Hard Work
Rather than leaving an old life behind, a successful retirement transition is more about intentionally moving towards a new one.
Carefully considering yours, and maybe your spouse’s, answers to the above questions will ensure that you set off on this new journey with enough money, enough to do and fewer regrets.
While our key focus is to ensure that you have enough money to sustain an independent life, we are committed to assisting you in making a happy and successful transition.
Making an impact
We have been working with a couple in their early 50s this month and although they are not quite ready to retire... “Have they had enough of work? Not yet!”, unfortunately, neither of them is in great health either.
We helped them realise they could afford their once-in-a-lifetime trips now, and still only work to age 60. We were also able to give them the confidence to employ someone, to help free up time now, rather than waiting until their full transition into retirement to do all the things they want to do.
The Stock Markets (updated 30 September 2024)
The key benchmark you should care about is achieving each of your financial and life goals and not running out of money.
The Budget
Why Waiting Can Be the Best Strategy
It would be remiss of me to write to you today, without mentioning tomorrow's budget. In periods of speculation, it is common for people to feel the urge to 'get ahead of the game.'
But often, it is only with hindsight that the best course of action becomes clear. Guessing correctly using foresight is a challenging endeavour.
By waiting for the official announcement, you will have a clearer picture of how the changes will impact you personally.
Once the full details of the budget are available, we can develop a strategy based on facts, not speculation. This allows for a more tailored and effective financial plan that considers your needs and circumstances.
Our Advice for Now
While the urge to prepare is understandable, the key takeaway is that caution is better than haste in the current climate.
We understand that waiting for more clarity on the proposed Budget can feel unsettling, but patience now could prevent costly mistakes later. Only with hindsight will we truly see how these changes will affect our financial landscape, and we are here to help guide you through the process once the details become clear.
Can you spot the difference?
We are aware of an increasing number of ‘phishing emails’ from fraudsters (up 51% since 2023). These scammers often pretend to be providers, banks or advisers and often use emails similar to those of their intended parties. This could look like VVealthwide.co.uk as opposed to Wealthwide.co.uk.
Here are a few precautions to take to keep your money safe:
Confirm the sender's identity before replying or opening an email and take extra care before carrying requests or clicking links
Be mindful if the request seems urgent or applies pressure via threatening acts such as account suspension
Look out for poor grammar and misspellings – legitimate emails tend to be checked more thoroughly
Consult the sender via telephone if you are unsure (and use their official website to get the contact details)
Make sure the other people in your life (children, parents, friends) know about these issues