Questions every professional preparing to retire should ask

It’s time to shift focus as you move from saving money to spending it. You’re ready to change lanes and use your lifetime savings to generate income as you decide on what to do next as you seek to move away from your professional career. Our financial advisers and investment managers can help you relax into retirement with a carefully considered flow of income. Here are our top questions to ask yourself… 

Is it time to think about slowing down?

We’re living longer, healthier lives in the UK. Over the last 40 years, life expectancy has been increasing because of advances in health care and improvements in living and working conditions¹. And between 1993 and 2018, employment rates doubled for those aged 65 and over².  

If your health and longevity follow the demographic trends, you might not feel ready to hang up your security pass at age 65. You could take the opportunity to work longer. Or you could take a flexible approach and reduce your workload gradually, add non-executive roles, or keep your hand in the industry as a consultant. 

Am I ready to plan for the next life stage? 

You’ve probably been working for a long time by the time you’re contemplating retirement. For many successful professionals, a substantial chunk of your self-esteem can come from your working-life contribution – your ability to earn money and support your employees, clients, families and communities. How would you feel without this dimension of your life?  

Think about how you’d feel about passing on the baton. Have you considered your succession requirements or options? Have you prepared the next generation? Take time to mentally prepare for letting go of your business or career. And consider any practical plans you could make to smooth the process. 

How do I see my retirement?

Imagine yourself having a wonderful retirement. What does that look like? Are you travelling, spending time with family, volunteering? What would you like to do with your time?  

Would your fantasy retirement mean you spend more or less money than you do now? Consider the financial implications of your retirement dreams.

If you live abroad or in more than one country yourself, things might get complicated in terms of tax and currencies. Factor in financial fluctuations and the possible need for expert advice.  

What have I got?

You’d be surprised how many people have no idea what they currently have. Your finances can be a bit like kitchen cupboards. Dig around in those files and assess all your assets to help provide options and build a plan.

Over the years, you might have accumulated all sorts of things – shares and other investments, Individual Savings Accounts (ISAs), Personal Equity Plans (PEPs), pensions, investments, property or business assets coming to you personally. And don’t forget any valuable items like classic cars or art that you may be prepared to let go at some point.

Will what I’ve got be enough for the retirement lifestyle I want?

You may have accumulated a lot of money, but how quickly will your lifestyle consume it? Think back to your ideas about your ideal retirement. Then combine it with everything you know about the cost of living, inflation, interest rates, moving home, money to help loved ones and medical or nursing care.

What’s essential to live, what would be nice to have and what would be a bonus? And remember to factor in that rainy-day fund. It’s probably even more likely to rain as you get older. Remember that if you’re approaching 65, men can expect another 18.5 years on average and women 21³.  

How do I plan my long-term income?

After a lifetime of accumulating money, preparing to move into decumulation mode can be daunting. But you’ve earned it. It’s time to enjoy spending what you’ve worked so hard for over the years and turning it into your income.

We can help you with cash flow planning for the long term. Our sophisticated online tools allow you to test out different scenarios to project forward to different financial outcomes. You can tweak the inputs and see the possible effects. For example, ‘What would happen if I retire two years later?’. This can empower you to make informed decisions about your long-term spending.

One of the biggest risks relating to retirement income is that if you start to take money out of your investments when returns are weak, it can reduce the size of your assets over the long term. We can help you address this by putting part of your money into a short-term pot to draw on immediately and investing the rest for potential long-term growth. 

Do I have the right advisers in place?

As the years have passed and your wealth has grown, the task of wealth management also grows. Does your current adviser have the expertise to manage it?  

You may need an adviser who offers a full wealth management service – one that not only takes the time to understand your situation and goals, then advises on a suitable plan but also has a team of professional investment managers who aim to create long-term portfolio growth.

You’ve worked hard. You’ll want to make the most of what you’ve achieved. Let us worry about the details while you enjoy the next phase of life. 

Sources

1. Office for National Statistics - National life tables – life expectancy in the UK
2. Office for National Statistics - Living longer: how our population is changing and why it matters
3. Office of National Statistics - National life tables – life expectancy in the UK: 2018 to 2020