Our business is over 40 years old and our many of our clients have known us for a very long time; indeed it could be said we’ve matured together over the years. In practical terms this means quite a reasonable proportion of the work we do on a daily basis is helping people in the run up to one of their most important lifetime financial decisions, namely retirement.
It’s fair to say we consider ourselves to be specialist in the area of retirement and long term financial planning. This blog post aims to explore the common themes we come across when talking to people about their retirement.
The psychology of retirement
Unsurprisingly it is important that people are confident they have enough money. This is as much to do with psychology as it is to do with finances. If a person believes everything is under control then the chances are everything will turn out ok. A key part of what we do therefore is to demonstrate in a simple, understandable way that this is in fact the case. A future blog post will focus on the art of cash flow planning, but that’s for another day.
Another regular conversation piece is whether or not the children or grandchildren will be okay. This is a much harder topic to delve into for obvious reasons but we tend to approach the discussion from the point of view that our client is only just thinking of retiring and it’s probably a little too early to worry too much about passing money down the generations; after all they might need their money themselves!
Care home fees
Care home fees often feature because most families have first-hand experience of this often challenging aspect of life. In the South East and London fees of £50,000 a year (from net income remember) are not uncommon. That is an awful lot of money.
Only last week a client explained that his mum’s care home fees were rising by 10% and the amount was justified purely by inflation rather than a change of the underlying condition. Very few people are wealthy enough to simply ‘afford a care home or two’ out of their savings so in reality funds that are otherwise destined to pass to the children, maybe the house, will be needed to fund care homes. People are accepting of this, even if they don’t like the concept on a number of different levels.
Not everyone wants to retire!
Ending this post on a more positive note you’ll be surprised how many people don’t retire because they simply don’t want to. It’s nothing to do with the money – they know they can afford to stop work – but they thoroughly enjoy working and can’t imagine not having the social interactions, the reason to get out of bed and the need to ‘engage their brain’ every day.
Plotting a course through all of these points and many more besides is what we do best and if you’d like to know more about how to approach thinking about contemplating retirement, please get in touch.