There is a temptation in retirement planning to focus on a single moment in time, one transition, the day you leave the office for last time, and become retired. To do this would be a mistake.
Not only has there been a 68% increase in the number of self-employed people over the age of 50 in the past 10 years but there is also a 25% chance of a 66-year-old male living to age 92 rising to age 94 for a female. Consequently, people are generally working longer but more importantly, they are working flexibly and phasing their way into full retirement.
This has two significant consequences for retirement planning.
Firstly, our finances need to be as flexible as our lifestyles have become. To achieve this, we need to be cognisant of liquidity. Not just cash but also owning assets that can be easily, and tax efficiently, liquidated to seize opportunities and overcome hurdles. In the past 12 months, we have helped clients move home without selling first, invest in their children’s businesses, and even fund the transition from CEO to Portfolio Non-Exec through the flexibility and tax efficiency built into their financial planning.
Secondly, we need to think longer-term if our wealth is going to last for life. De-risking your portfolio too early could hamper the ability of your money to outlast you whilst restricting your choices and freedom along the way. To protect the value of your wealth we need to utilise globally diversified, low cost, risk-managed investments that will safeguard your lifestyle throughout an active, enjoyable, and long retirement.
In summary, Financial Planning is a process. Not an infallible roadmap perfectly laid out ahead nor a fixed plan to crescendo toward a single moment in time but rather a repeatable process by which to make good decisions and build wealth that lasts for life.
Jon Doyle is Founder and Financial Planner at Juniper Wealth Management. Advising clients since 2008 he has guided clients through good time, bad times and the ugly. With a clear vision on how advice should be delivered and strong opinions on how we should be investing money in order to live the life we want to live free from money worry.