What are your retirement plans? Many business owners find that a daunting question.
Maybe you’re at the beginning of your business journey and haven’t considered it, or you’ve been in business so long that you can’t imagine retiring.
Either way, we think business owners should always be looking ahead to their post-work life with enthusiasm.
What Does Your Retirement Look Like?
We believe retirement has always been about doing less of the things that you don’t want and more of the things that you do; spending more time with family, friends, doing charity work, going on holiday or taking up a hobby. We’re seeing an ever-greater flexibility around the transition between work and non-work.
Retirement is merely an extension of life prior to retirement. If you manage your affairs within your income and spend on things that really matter to you, you are likely to be able to perpetuate that into a long and happy retirement.
Truly understanding what is important in your future materially affects how long you have to wait for it.
If retirement is all about possessions, you will have to work longer and save more money to be able to afford that lifestyle. If your aspirations are more modest (assuming all else is equal), you can work less, much sooner – it sounds simple, and it can be.
A Practical Retirement Plan
The choice is and has always been, what do you want to do, how much will it cost and how do you generate sufficient assets or income to achieve it?
We advise clients to assume that they’ll live to 100 and then work backwards, to be truly covered. Based on your lifestyle ambitions, you may need more, or even less, money than you thought.
How much does your preferred lifestyle cost? It’s clear that foreign travel or starting another business will require more funds than simply spending more time with the grandchildren or indulging a hobby. Try to work out how much these ambitions are likely to cost and multiply that by your remaining years to reach 100 and you’ll have a ballpark figure of the amount you need.
Whatever that amount is, identifying your retirement lifestyle in advance will help you plan the income you need and even how long you remain working for.
We know many business owners worry about running out of money when they retire but with some forward planning, retirement can become the next exciting phase of your life.
What are your retirement plans? Do you think retirement is changing as a concept?