If you are like me you may sometimes think about what life will look like in the future when you don’t have to work? You may think of the hobbies you have or will take up or the extra time you can spend with your family. You may be considering looking after grandchildren or planning the next holiday. Whatever the picture looks like it’s good to plan and to think about how much your life is going to cost?
As a Chartered Financial Planner I have these conversations with my clients every day. To be honest, there is nothing more worthwhile in my role than helping people have some control over the choice of whether to work or not. We use the term “Financial Independence Day rather than “retirement” as, to us, it means a choice. Most of our clients would like to know when they can afford to stop work altogether but many will phase into it. To have these kinds of choices you need a robust financial plan.
Here are some questions to ask yourself that may help you to formulate your own plans:
- It’s never too early to begin thinking about “Financial Independence Day”, – ideally when would you like this to be?
- If you are married/in a long term relationship, perhaps it would be good to think about this together?
- What does a great plan look like? What’s on your bucket list?
- Imagine it’s a Thursday morning in November, 6 months after you’ve stopped working – describe what your day ahead looks like?
- What do you spend now? Is this likely to change when you stop work?
- When your salary is reduced/turned off where will you get your income to cover your spending plans?
- How important is it for you to have certainty of income v flexibility of income?
- Do you know how much your State Pension is and when it will be paid?
The job of a good financial planner is to get you thinking ahead about what you want the future to look like and work with you to put an action plan in place to increase the probability of you achieving your goals.
Happy Financial Independence Day!