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Enjoying the retirement you deserve

Feb 02, 2021

The odd thing about planning for retirement is that it takes a little while to get into the mindset of what you’re really planning for. You’ve made your money work as hard as possible throughout your life to achieve the retirement you really want. But now what?

It’s easy to fall into the trap of ‘planning for retirement’ as though it represents the finishing line, an end in itself, but the reality is your retirement is a whole new phase of your life, one that could last for decades. While it’s sensible to ask yourself when you can retire, how much you’ll need, how you can get there more quickly, it’s just as important to think about what you’ll want to do with those years.

Getting retirement right is a matter of balance – between peace of mind about your money and the freedom to enjoy the years ahead. Here, we’ll look at some key considerations to help you simplify that balance.

1. Don’t obsess about investment returns

There’s an axiom in lifestyle financial planning that a return on your investments isn’t as important as a return on life, and that’s never more pertinent than in retirement. If you’ve been investing towards your goals for many years then returns will have played a major part in giving your money the best chance to grow in the long term. There’s nothing wrong with that, when you set out your investment goals you have a target date in mind, and the more your money grows, the better able you’ll be to meet or even exceed that date.

But once you reach retirement, the focus shifts to enjoying your life. At this point it’s important to remember that an exciting life is better than an exciting portfolio. That doesn’t mean you should turn your attention away from keeping your money in tip-top condition, but it means the goal is now ’better’ rather than ‘more’. Money worries would detract from a peaceful retirement, but so would focussing too hard on returns.

2. Work backwards from expenditure

When you’re planning for the future, you need to begin by understanding the life you’ll want to lead, because in the end, this is all about you. Chasing ‘more’ for its own sake isn’t really helpful – what you need is a clear picture of the lifestyle you’re working towards, which will then give you something tangible to measure against your portfolio. By having a clear vision of what retirement looks like for you, you can then work with your financial planner to see whether your portfolio can fund it, and if not, what changes you could make to get it over the line.

While you don’t want to overreach, you should also avoid the ‘cut back and hunker down’ trap. Your retirement could last a long time and you’ll still want to spend your time doing the things you enjoy. If you don’t want to be wishing for the days when you could spend money once you reach your 80s and 90s, get that clear picture in place.

3. Make monthly withdrawals

We all know that Lamborghinis are fun, but they make a terrible retirement purchase. As much as we all want a fun and fulfilling retirement, it needs to be measured out in much the same way as the rest of your life. For most people, the working years will have run on a monthly rhythm with monthly outgoings, a monthly pay packet and a look ahead to how the next month will shape up.

There’s no reason to change that in retirement, in fact it’s beneficial to keep it that way, because as you move into a new phase of life it’s good to have a familiar grounding to help you find your way. Once you’ve reached the magic number that you need for retirement, you need to maintain an element of structure and discipline. That doesn’t mean not being able to enjoy yourself – quite the opposite – it’s about giving yourself the ability to enjoy things for many years to come.

4. Redefine your ‘spending’ habits

Once you reach retirement, it’s important to realise your most precious resource is time. That’s not to be morbid, there may be many years stretching out ahead of you, but still, it’s important to make sure you get the very best from the time you have. Up to now the word ‘spending’ has gone hand in hand with ‘money’, but now spending really needs to be about time. You’ve worked hard to get to this point and while you should absolutely keep a close eye on the money you have to work with, the focus should now be about enjoying the kind of retirement you really want and doing the things you always wanted to do.

Finally, try not to worry. Sage words indeed, all we have to do is stop worrying and we’ll have a wonderful time. The truth is of course you’ll worry a bit, everybody does, but the future is yours to create and enjoy, not to anticipate or fear. A financial life plan that’s well constructed, diligently followed and aligned to a clear vision of the retirement you really want will stand you in good stead. You’ve worked hard for this, so most of all, enjoy it.