As financial planners, retirement is a key area when talking to our clients. In fact, as retirement specialists this is where we spend most of our time. So it came as a surprise when at a conference in London last year, Sarah Hogan of KBA Financial suggested that retirement shouldn’t even be part of the discussion. Or, putting it another way, rather than asking clients when do you want to retire? we should be asking what would it take to live a life that you never want to retire from?
In the last week I have spoken to two clients whose financial plans look healthier as result of a career change. They haven’t increased their earnings, but they enjoy their new vocation so much that their target retirement date has been pushed back by a number of years. Despite a decrease in their annual earnings, their willingness to keep working has increased their earning capacity over the rest of their working life.
One client has moved from a very stressful job to a role she enjoys and looks forward to every day. My other client had started a new career he passionately spoke of before switching to it. For both clients, life looks brighter not only in the present day but also as part of their longer term planning.
Life shouldn’t be about grinding through your days until you reach retirement only to drop everything there and then. Not only do we need to enjoy our working lives, we also need to remain engaged in later life and have a purpose that gets us out of bed each day. Our brains still need stimulation and we want to remain part of something bigger than ourselves.
Of course, financial independence is still important. We want to be able to live our lives with freedom and to make decisions without immediately worrying about the financial implications. But I suspect that the lure of reaching financial independence as quickly as possible will in many cases be a red herring when in actuality what we seek is flexibility, control and purpose.
We must also accept that as we get older, our ability to work will change. This might mean working fewer hours, changing jobs or moving into the voluntary sector. I’m not expecting us all to still be working 9-5 well into our 80s! But retirement needs to be seen as something more fluid than it is now. It’s no longer a dividing line but a gradual progression. And getting this progression right could be the difference between making the most out of every single day and spending years miserably grinding towards a retirement that might not be worth all the hard work.
So I encourage you to think about your current lifestyle, what you enjoy, what you don’t and what would need to change for the concept of a target retirement date to no longer be a key decision? What sort of job and working pattern would suit you so much that you really wouldn’t think about it in terms of when you would stop?
Our job here at Fyfe Financial certainly isn’t just about making the numbers add up in your retirement plan. It’s about making sure your experiences add up to a life well lived and I believe it is important that we recognise this. Overall, a great retirement plan should really be part of an even better life plan that allows you to live a life that you never want to retire from.
Richard Fyfe is a Chartered Financial Planner and a Director of Fyfe Financial.