As financial planners, retirement is crucial when talking to our clients. As retirement specialists, we spend most of our time in this area. So it was a surprise when Sarah Hogan of KBA Financial suggested that retirement shouldn’t even be part of the discussion at the Humans Under Management conference in London last year. Or, putting it another way, rather than asking clients when you want to retire? We should ask what it would take to live a life you never want to retire from
In the last week, I have spoken to two clients whose financial plans look healthier due to a career change. They haven’t increased their earnings but enjoy their new vocation so much that they don’t want to retire. Despite a decrease in their annual revenues, their willingness to keep working has increased their earning capacity over their lifetime.
One client has moved from a very stressful job to a role she enjoys and looks forward to every day. My other client had started a new career he passionately spoke of before switching to it. For both clients, life looks brighter in the present day and as part of their longer-term planning.
Life shouldn’t be about grinding through your days until you retire, only to drop everything there and then. Not only do we need to enjoy our working lives, but we also need to remain engaged in later life and have a purpose that gets us out of bed each day. Our brains still need stimulation, and we want to stay part of something bigger than ourselves.
Of course, financial independence is still important. We want to live freely and make decisions without immediately worrying about the financial implications. But I suspect that the lure of reaching financial independence as quickly as possible will, in many cases, be a red herring when, in actuality, what we seek is purpose.
We must also accept that our ability to work will change as we age. This might mean working fewer hours, changing jobs, or moving into the voluntary sector. I’m not expecting us all to still work 9-5 well into our 80s! But retirement needs to be seen as something more fluid than it is now. It’s no longer a dividing line but a gradual progression. Getting this progression right could be the difference between making the most out of every single day and spending years miserably grinding toward a retirement that might not be worth all the hard work.
So, I encourage all our clients to think about their current lifestyles, what they enjoy, what they don’t, and what would need to change for the concept of a target retirement date to no longer be a critical decision. What sort of job and working pattern would suit them so much that they wouldn’t think about when they would stop?
Our job isn’t just about adding numbers to a client’s retirement plan. It’s about making sure their experiences add up to a life well-lived. We’re potentially doing our clients a disservice if we don’t recognize this. Overall, a great retirement plan should be part of an even better life plan that allows our clients to live a life they never want to retire.