Having the confidence to retire
Today, I met with a new client. He is approaching 60 and has been running professional practice for some years. He is now considering retirement.
We started off by discussing his pensions, and other assets, as well has his income sources for the future. However, it quickly became clear to me that what he really needs at the moment is to know if he can be confident to retire; after all, this is a big decision. Once he gives up his professional practice, his income will be limited, although he can always work as a consultant.
What we spoke to him about was the concept of comprehensive financial planning.
We will begin by analysing his future goals, income, expenses, assets etc, and then put these all together to work out whether he can be confident to retire now, or whether he will need to work for a few more years to build up more resources. This is a big decision, so needs to be taken with his eyes wide open. Out philosophy is that it is better to know the real value of your money and assets so that you can enter retirement confident that you can be financially secure; if this is not the case, then we can start to work on what will achive your goals.
We will be able to paint a picture of his retirement as if he had retired yesterday. If his resources are not enough, we can start to look at other options by examining different scenarios, such as retiring later, spending less money, working part time, downsizing his home etc. After all, these decisions need some careful planning.
Once this has been done, we can agree a strategy to best meet his needs, and this will result in some major changes to his current financial situation: taking pension income, amending investments to focus on income rather than capital growth, and possibly the sale of his home. We will work closely with his accountant as there will be other issues raised by the exit from his business.
We find this a rewarding process in that we are actually helping the client to realise his ambition to retire on enough income to achieve his future desired lifestyle. from the client’s point of view, this is not about financial products, but more about financial planning to give him the confidence to stop accumulating and start spending.
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Tags: Financial planning, investments, Pensions, retirement
