You’ve earned it – so don’t forget to spend it
Retired, no debts, no mortgage, all this money, but just won’t spend it.
Surprisingly, it’s not uncommon in our profession to find people reluctant to enjoy the fruits of decades of hard work.
Retirement planning isn’t just about percentage returns on your investments, it’s about spending it and enjoying it.
The point is not just to look at the numbers in a book and see how great they look, it’s about if you really fancy going to the Norwegian fjords on a cruise in a luxury cabin, then why don’t you just do it?
I’ve got a lovely reputation with a lot of older clients who say ‘well Michael would say we should get a new bathroom in.’
‘Michael says we should have flown business class.’ All your finances are covered and this is just enjoying what you’ve worked so hard to make.
When we look at retirement at say 60 and you live until you are 100, in terms of retirement planning there is what we call the golden decade.
That ten years between 60 and 70 where you are fit enough, are healthy enough and can be bothered enough to go to the airport and stand in line to get on board a plane to a far flung destination.
We often ask clients ‘what excites you about retirement?’ Not ‘when do you want to retire and what do you want to do?’
The question can throw some people who haven’t looked at what they do when they finish work in quite that way.
‘You can afford to pay the gas bill but what do you want to do, where do you want to go, what do you want to see?’
It may sound contradictory compared to the work financial professionals do to build up their clients’ wealth, but it gets to the point where you need to look at how you are going to spend your money.
Helping our clients focus on spending their hard earned cash, experiencing the things in life they may only have dreamed about, gives us a real buzz and shows the difference our job can make to the quality of people’s lives.
Investments are doing fantastically well for those planning retirement at the moment.
Research from the Prudential revealed people planning to retire this year can expect to live off a record average annual income of £19,000 – ten per cent more than those that retired in 2017.
Expected retirement incomes have risen consistently since 2013 when they were at a low of £15,300.
I appreciate people have gone through decades of making and saving money and it can be difficult to change that mind set, a difficult habit to break.
But why shop at Aldi when you can shop at Waitrose?