Modified on: June 2023
The 3 most important retirement questions you need to ask yourself
This article on the 3 most important retirement questions was originally featured as a guest post on Pounds and Sense.
Have you had enough?
Itâs Sunday evening and youâre winding down after a busy weekend with friends and family. As you sit back in your favourite chair and think about the week ahead, you canât quite get comfortable.
The thought of going back to work on Monday morning makes you feel a bit uneasy. The thought of doing it for another 5 â 10 years makes you feel sick!
If youâve ever experienced this, you might be approaching the point where youâve had enough (thatâs a technical term).
The question you need to ask yourself is whether the pain of going to work outweighs the benefit. If you find yourself in this situation; where youâre emotionally, physically and mentally drained and no longer excited to perform at the highest level, itâs time to do something about it. This is the most powerful, yet most simple of the three retirement questions.
Having had enough doesnât mean that itâs necessarily time to retire. It simply means that you need to change the status quo.
Maybe youâve had enough of your current role, but youâve got more to give in another capacity. Your years of wisdom could be very valuable in a different guise. Perhaps youâve had enough of having a boss and are ready to go it alone. With the years of experience, itâs no surprise that over 50âs are the best entrepreneurs. Or maybe youâre happy to carry on but just want a little bit more flexibility around what you do and when you do it.
These are all useful options to explore, particularly if you havenât got enough to hang your boots up yet. Sometimes, the benefit of working for âjust one more yearâ can make a real difference to your financial situation.
Do you have enough?
If youâve had enough, and are ready to move onto pastures new, you need to ask yourself if you have enough. This is by far the most important of the three retirement questions.
Whenever I ask this question, people start telling me how much theyâve got saved up. But theyâve got it all wrong. Itâs like trying to build a house without seeing the floor plans. You need to start with the end goal and work back from there.
Working out if you have enough requires knowing:
1. Your monthly number â this is how much a comfortable lifestyle is going to cost.
2. Your monthly income â this is how much income youâll receive from the State Pension, final salary pensions, buy to let properties, etc.
3. The gap â this is the difference between the two, and where your savings come in. Broadly speaking, if youâve got 20x the gap in savings, you should be fine. Any less and you might not be quite there yet.
For a bit more detail, I suggest checking out this post: “when can I afford to retire?” You might also want to check out this video on how to plan for retirement.
But, thereâs more to retirement planning than just simply figuring out your ânumber.â Finding your purpose in retirement sounds wishy-washy, but without a clear purpose, youâre likely to be one of the 25% of retirees who return to work.
Will you have enough to do?
You need to ask yourself what you are going to do when you wake up on that Monday morning, free from the ties of work, and how are you going to fill your time.
If for the last 40 years youâve been busy being busy – chances are youâre going to get pretty bored sitting around the house for 40 hours a week.Â Iâve seen many successful individuals retire, only to get bored and return to work within five years. The newly-found free time that retirement provides can be overwhelming for some.
Retirement is about having enough money to sleep at night and enough purpose to get up in the morning. Itâs not just about the numbers, itâs about how youâre going to spend your time. Purpose will drive you in retirement, money will fund you. Try not to get those two mixed up.
The bottom line is thisâ¦ retirement is the biggest transition youâre ever going to make. Itâs not the sort of thing you do regularly and not the sort of thing you want to get wrong. By asking yourself these three questions, youâll improve your chances of achieving a successful retirement.
If you want a little bit more help with planning your retirement, feel free to drop me a line.
All the best,
James Mackay, Independent Financial Adviser in Bristol
Financial Advisor Bristol and Pension Advisor Clifton
About us: Frazer James Financial Advisers is a financial advisor, based in Clifton, Bristol. As an independent financial adviser, weâre able to provide independent and unbiased financial advice. We provide independent financial advice, pension advice, investment advice, inheritance tax planning and insurance advice.
If you would like to speak to a Financial Advisor, we offer an Initial Financial Consultation without cost or commitment.Â Meetings are held either at our offices, by video or by telephone. Our telephone number is 0117 990 2602.
Frazer James Financial Advisers is located at Square Works, 17 â 18 Berkeley Square, Bristol, BS8 1HB.
This article provides information about investing, but not personal advice. If you’re not sure which investments are right for you, please request advice.
Remember that investments can go up and down in value, you may get back less than you put in.