Rethinking Retirement for a Comfortable Financial Future
Most of us have to “work” in order to live well. Many of us spend a substantial amount of hours per year working, and to find satisfaction in life there must be a level of satisfaction in work and career. Earlier in our lives, we often think of work as being a task-oriented series of jobs as we discover our interests and talents. Our career is a journey, a culmination of training, experience and, ideally, passion. It leads us down a path where your job becomes a career you take ownership and pride in. When we talk with clients about financial planning, inevitably work and career are influential factors as they’re the facilitator, at some stage, for most of us to generate income which allows us to make choices about how we want to live our lives.
The goal of the latter part of a career journey is predictably a comfortable financial future – or for many, retirement. In decades past, many people typically had one career and often one employer. That is not the reality anymore as careers and work become more fluid, industries change, and expectations of employees evolve. When we start the financial planning process, we look at the elements of your career that are in your control, compared with the elements that are out of your control and determine how we can maximize the elements you do control to result in a retirement plan that meets both your goals and your values.
Careers are looking different.
Since the pandemic shook us all and changed the way many of us work, more often now from home, we’re seeing a lot of clients reevaluate where they are in their lives and on what timeline they’d like to retire. We’re seeing an increase in people wanting to plan for a comfortable financial future so they can retire at a younger age than previously considered. Our clients value flexibility in the way they earn and we’re talking a lot about different ways to work. Options like working part time, remotely, on contract or considering self-employment are all increasingly viable ways to generate income in a different way to traditional employment. With fewer companies offering pensions and savings opportunities, retirement is becoming more of an antiquated idea.
Our clients are their best source of income.
The onus for a comfortable financial future rests more now on the individual and less on the structure of a pension plan and the job security that used to be expected. You have to rely on yourself to save and plan, for both the expected and the unexpected. Ideally this planning should begin when you start a job or, at a minimum, once you start a career. Creating the desired lifestyle, leisure opportunities and freeing the time to enjoy them is a strategic process. One that accounts for the detours, both positive and challenging that life inevitably presents along the journey.
While we support clients with their financial planning, making recommendations and offering support when it comes to saving, planning and investments, we also help our clients envision what it is they want in life. We need to understand this vision and the values it’s built on before we can put together a financial plan.
Make a plan.
We encourage all clients to begin planning early and make choices along the way to set themselves up so they can have the freedom to decide to work differently or when to integrate more of that work life balance. There are going to be periods of life to build up that net worth account. That’s the ticket to making choices down the road. When something happens that derails the best laid plans it can eat into those savings which is why it’s important to have a plan early. Work and career aren’t the only factors. There are family, health and other considerations that can impact savings and earnings. And the bigger financial cushion available, the more freedom and less stress a client will have.
Especially during challenging or uncertain financial times, like we’re in now with higher cost of living and interest rates, it can be valuable to look at ways outside of work to bring in income. Is there an asset you own that you could rent or a service you can offer on top of your regular work? Can you create earnings from what you already have? Are there ways that you’re not leveraging some opportunities in how you’re already working? Are there ways to get paid differently for work you’re already doing that have more tax advantages? Can you invest? There are other ways to create wealth beyond simply working.
Take comfortable risks.
Looking at your flow of money and understanding earning patterns can determine the best way to save. We work with clients to manage that flow in a most effective way to live life today but also to help start to plan for that future self to be able to make choices and take comfortable risks.
When it comes to risk in investing, the level of risk often equates to the client’s experience with investing so far. There’s monetary risk but there’s also emotional risk. We don’t want investment risk causing anyone to lose sleep so we have to weigh the comfort with taking an investment risk, ensuring there’s still a financial cushion should the result not go as hoped. We have an investment philosophy that we create with our clients that determines comfort through a series of questions. There are also ways to mitigate risk, like having adequate insurance and an emergency fund.
After many many conversations with a variety of clients across several lines of work and career paths we’ve come to the conclusion that enjoying the work you do is more valuable than capital. Work is where we spend a lot of our lives and we encourage happiness. Happiness prolongs life as well, and equates to good health, an invaluable investment. And ideally, if you’re enjoying your work, you’re progressing in your career, then your financial rewards increase.
While many conversations begin by talking about retirement, we don’t often end up having that as our focus. We encourage clients to create a life they don’t want to retire from. A life with balance, of work and career, life and leisure, financial stability and good health is optimal. Full retirement is not the common goal as it was a decade or two ago and we’re enjoying having those conversations with an increasing number of clients that are finding creative ways to earn wealth through activities, services, investments and work that they love. Starting early and building financial comfort allows that opportunity to ensure that you’re enjoying your career. With a risk-balanced portfolio and a proactive planning approach we hope to support our clients in finding work and careers they love that compensate them in ways that allow them to enjoy life to its fullest.
Are you dreaming of retirement or want to build a comfortable financial future? Get in touch with Tracey and Kristina and let’s make a plan together.
We are looking forward to the opportunity to meet you! For more information, please feel free to reach out.
Share this post: