The rise of mobile working, healthcare advancements, and higher living costs are all reasons why it is no surprise that we are working longer and retiring later. Combine this with the fact that final salary plans are becoming scarcer, savings and investment opportunities are increasing, and what you have is not your parent’s retirement.  

As a result, when we mention the words “retirement planning,” nine times out of ten we are overwhelmed and unclear about what that entails. That is understandable, because how can we predict what our life will be like in 10, 20, or even 30 years, but as financial planners we are here to tell you that a well-thought-out retirement plan accepts that uncertainty is part of the equation.  

Generally, when we think about solving the retirement plan equation, we believe that success is finding answers to a long list of questions. For example, “When can I retire?” “Where can I afford to live in retirement?” “How often can I travel?” and “Can I afford to gift to family and leave a legacy?”, are just a few of the questions that arise.  

As financial planners we feel that instead of searching to find the answers to those questions you must start by focusing on what you want retirement to look like. 

Imagine a blank canvas where you get to paint the picture.  

The questions above should now read; “When do I want to retire?” “Where do I want to live in retirement?” “How often do I want to travel?” and “How much can I gift and leave as a legacy?”. 

Of course, the inputs to the retirement plan equation are important; current income, expenses, savings, investments, taxes, living situation, I could go on. 

However, as financial planners we cannot strategize around altering an input (reducing expenses or increasing savings) and we can certainly not act by adding or subtracting an input (opening a Roth IRA or selling a property) if we do not know what your unique and abstract retirement painting looks like.  

We agree that starting your retirement plan is a daunting prospect, but it should not be a ‘one-and-done’ exercise where you sit down at the kitchen table with a pen (or paintbrush) and a calculator.  

Whether you are about to start your first job, fully employed, semi-retired, or even actively retired you should be continuously working on your retirement plan. 

As financial planners we believe a good rule to follow is to revisit and make adjustments to your plan every 12 months, because, as we know, situations can change. 

So, what are you waiting for, go and grab your paintbrush and start painting… 

Disclaimer:

This is not advice or a recommendation. You should consult with your tax attorney and accountant to determine whether any of these actions are appropriate in your circumstances.

Certain investments carry a higher degree of risk than others and are, therefore, unsuitable for some investors. Past performance is not a reliable indicator of future results. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your initial investment.