Retirement Planning: “the richest person in the graveyard.”

One of our clients said this a few years back when discussing retirement planning. He was quoting his father. He’s right of course. You don’t want to die with a full bank account. Who does? Far better to allocate to your family, your legacy, and your lifestyle beforehand. Then you can have fun. You can do this if you have a good-enough plan.

Dreams can come true

Many people who manage their own finances do a good job.

More power to them. There are all sorts of products out there that tell you what money you have and how it’s performed.

But, like the client above, who also managed his own money for a while, the DIY approach doesn’t really answer the big questions, like, “can I retire now?” and “can I travel more?”

And what they (the clients) found is that answering those questions is the most important thing of all.

Saving and investing with a goal is so much more effective, enjoyable and – to be frank – purposeful.

There’s a great video about how a plan enabled them to travel more here.

Leave your legacy

They didn’t want to be the richest in the graveyard any more than you do.

We can’t say exactly how we helped them. That’s confidential. We treat you and your money with the respect and discretion you deserve.

But it’s no secret to say we built a bespoke plan that gave them the lifestyle they wanted.

And a big part of that was helping them think about legacy. Many people assume a legacy is something you ‘do’ at the end of your life.

Not so. Your legacy is something you should sort out well beforehand. Because the sooner you do it the sooner you know exactly how to fund your lifestyle.

We’ve talked in other blogs about inheritance planning, saving for your children and grandchildren, and philanthropy. These are the main components of your legacy.

What we’d like to talk about here is spending the balance of your money: the fun stuff.

Travel

Most of our retirees travel more.

Many like to do it in style. For example, a luxury safari for 2-3 weeks would cost around £2,000-£5,000 each.

The other way to spend on travel is to do it slowly. Taking a camper van around Europe for six months may set you back a similar sum in the round. But it requires good planning – both logistic and financial. Knowing you have a sufficient pot to draw on makes those magical, spur-of-the-moment decisions all the sweeter.

Or you spend time and money. Cruises, river trips and long-haul are all popular. So is the golden gap year, with retirees taking an average of five holidays a year and spending far more than they used to.

Another way to spend time and money is a holiday home. If you’ve saved purposefully, and if you have a plan, there’s no reason why this shouldn’t be in reach.

A holiday home in, say, France averages around £250,000. If you’ve paid off your mortgage, if you’ve saved carefully and if you have a plan, perhaps this is well within reach.

Underestimations

So many of our clients underestimate how much they have – and / or they miscalculate their spending power.

This is particularly common when we meet a couple who’ve saved independently: two pensions, two sets of ISAs, two sets of savings accounts and so on.

It’s a joyous moment to say, “well, the plan says you can retire now”, or “you can definitely afford that holiday home.”

Having a framework to think about your money and how you can spend it. Having clear indicators of what you can and can’t afford, is practically essential in retirement.

As one client put it, “my planner has given me permission to spend!”

And that’s all possible with a planner and a plan.

If you’re worried about whether you’ll have enough to retire on, why not get in touch? You can find us at hello@firstwealth.co.uk or 020 7467 2700.

Approved by Best Practice IFA Group Limited on 25/10/2024.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.