Can financial planning give you time back?
“It’s really clear that the most precious resource we all have is time.” Steve Jobs
As the nights draw in and the temperature begins to drop outside, we are nearing that time of year again when the clocks go back one hour (Sunday 31 October). With it comes a time of reflection – firstly, where has the past year gone and secondly, what are we going to do with the extra hour we’ve gained.
For some, it may mean an extra hour in bed, a chance to squeeze in a morning run/walk or even a good excuse for a lazy morning with the family. The point is we use the hour as we wish, which poses the question, what would you do if you could get more than one hour back?
Can I afford to retire?
One of the key topics in our client meetings is retirement and specifically an age they have in mind to achieve financial freedom, giving the ability to choose how they spend their time in the future. For some it may be to continue to work for the enjoyment they get, for others it might be to pursue other interests, hobbies, or volunteer work. The age could be driven by the date they can access their pension pots or when they can draw their State Pension, however it may not always be the age most suited to their circumstances.
There is no longer a fixed retirement age in the UK, therefore the decision to stop working is entirely down to you. The age at which you can access your pension can often subconsciously dominate that decision however this is worth questioning to ensure you maximise your retirement plans.
Can I afford to take a lower paid role which is closer to home?
At Equilibrium, our primary purpose is to make people’s lives better and we can only do this by really getting to know you. Our financial planners ask many probing and often uncomfortable questions to find out what the motivation behind your wealth is and what you are most passionate about.
In the case of one of our clients, who held a senior role in an organisation and suffered a particularly long commute to work, time at home was the key thing she wanted more of.
During her annual review meeting, she spoke of the pressure of work and travelling taking their toll and how it impinged on her home-life as she was either at work or exhausted when she returned. She enjoyed working but was not sure how to get a better work/life balance.
Our financial planner worked with her to establish the assets the family held, and how that could translate to time at home in the future. With the help of cash-flow modelling we identified that based on the life they wanted in retirement, and how much that would cost, the client and her husband were in the position now where they could choose how she spent her time in the future.
Even in the event of adverse market conditions or prolonged higher inflation, they should still be able to maintain their standard of living. Not only that, it is likely they would also still be able to pass on some of their wealth to the children. That can bring its own problems – see our related article ‘Are your kids ready for your money?’
During the discussion, our planner questioned whether she would consider a less pressurised role, closer to home with a lower salary. The client pondered on this and said she had in fact seen a job advertised which looked interesting and located only a few miles away however it would mean accepting a significant reduction in income.
By modelling the effect of this lower income, from now until retirement, our planner was able to demonstrate that this change would not make a significant impact on the financial plan. Whilst she would bring home less income, she could in theory stop the regular savings into ISAs they were currently making and still have enough to support their future aims.
Fast forward 12 months, the client has left her senior job and is now working in the position she had seen advertised. She now feels a different person as she has 10 hours a week extra at home. This means more time with the children during the week and more energy to enjoy family days out at the weekend.
Can I have more time with my family?
Flexible working provides the opportunity for many to work: from home, part-time, compressed hours, annualised hours, flexi-hours, phased retirement or as part of a job-share. Anyone can request flexible options from their employer, enabling those who wish to continue or extend their working life, whilst creating time to spend with children or grandchildren.
Interestingly, the German market and consumer data company, Statistica, recently published information on flexi-working demographics (May 2021), “In 2020, 45.4% of workers in the UK who were aged 70 or over mainly worked from home, compared with just 3.6% of workers aged between 16 and 19.”
How can you help me?
With these options in mind, what would you say if somebody told you it was feasible for you to do whatever you please, starting from tomorrow?
Would you choose to step down from your position and take a less pressurised role?
Spend more time with your children/grandchildren?
Become an unpaid volunteer?
Go back to university?
Start a new hobby?
The options are endless. You may not be able to answer this straight away and that’s okay.
Changes do not necessarily need to be as drastic as changing jobs, the point is if you had the choice, how would you most like to spend your time?
Our financial planners can enable you to live the life you want so why not start today and book a no-obligation chat here.
This blog is intended as an informative piece. If you have any further questions, please don’t hesitate to get in touch with us using the form below or by reaching out to your usual Equilibrium contact.